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What Trump’s ACA Changes Will Mean for Small Employers

October 18, 2017

Amid the many questions it raised, there’s one thing clear now that President Trump has signed an executive order that would begin to dismantle the Affordable Care Act:

Small-business owners, particularly those with fewer than 50 employees, will want to reconsider their decision to send those workers to ACA exchanges for their coverage. The owners themselves will want to think about whether to continue buying their own coverage through the exchanges.

One out of every five Obamacare customers — 1.4 million people — was a small-business owner, self-employed or both, in 2014, the first year ACA plans were available.

Under the ACA, some companies found it in their self-interest to stop offering health plans and instead direct employees to the exchanges. That would change under the executive order signed by the president.

Also read: Workers’ Comp Rates Could See Big Drop in ’18

A separate announcement from the White House that it will immediately stop reimbursing insurers for cost-sharing reductions only served to underscore the point: the ACA may well be on its last legs.

The Trump administration’s push to modify and eliminate certain parts of the law includes new rules issued in early October allowing a greater number of large employers to exclude coverage for contraceptives based on moral or religious grounds.

It’s important to note that the president’s Oct. 12 executive order is very broad, and does not, itself, make any specific changes to existing regulations. Yet while the order’s specific impact will remain largely unclear until agencies can issue further guidance, here’s a look at what it contained:

Association Health Plans

It directs federal agencies to expand access to association health plans, under which several businesses of a similar type pool funds as a way to pay for benefits or buy group health insurance for their employees.

Association health plans, which can be sold across state lines, offer lower premiums but they typically don’t include coverage for the same range of medical conditions found in better plans. They also are known to cover only the healthiest customers, leaving the sickest populations stuck in plans whose premiums would soar.

Short-term, limited-duration Insurance

The executive order also directs the Labor, Health and Human Services and Treasury departments to consider expanding coverage through low-cost, short-term, limited-duration insurance, which is not subject to the ACA’s requirements.

Under the ACA, the duration of such policies was limited to less than three months. Previously, this type of insurance was allowed to last for up to 12 months and could be renewed.

President Trump’s EO would revise the rules back to allow for longer periods and renewals. The main groups of individuals who would benefit from such a change are those who are between jobs or people who missed the exchange open enrollment period.

Health Reimbursement Arrangements

Finally, the executive order directs the departments to consider making changes to HRAs that would allow employers to make better use of them for their employees. HRAs are employer-funded accounts that reimburse employees for health care expenses, including deductibles and copayments.

The executive order envisions making employer HRA contributions tax-deductible. It also would allow HRA funds to be used for premium reimbursement, and allow HRAs to be used in conjunction with non-group coverage.

Scott McGraw is Vice President of CCIG’s Employee Benefits division. Reach him at 720-330-7924 or

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