By now, we all know of President-elect Trump’s plans to repeal the Affordable Care Act. And while many Americans are concerned about the future of health care coverage, it’s important to remember two critical factors: one, a full ACA repeal is not imminent, and two, employer insurance is not going away anytime soon.
A repeal is not immediate
Until Trump takes office in January, we won’t see any major changes to the current healthcare system. Even then, it’s unlikely we will see a repeal and replacement of the ACA for three to nine months. Admittedly, some changes can be made immediately, with the stroke of President Trump’s pen — such as a freeze on enforcement and/or implementation of certain provisions and regulations, and rolled back enforcement of various mandates and requirements. Congress can use the budget reconciliation process to make additional changes, but those are restricted to policies that impact revenue and expenditures. More substantive changes to the ACA will require legislative action; since it typically takes two years to repeal legislation, we won't see a full ACA repeal (if at all) until 2018 at the earliest.
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Employer insurance is not going away anytime soon
According to Tom Barker, partner and co-chair of healthcare practice at Foley Hoag, a leading international law firm, health insurance is still too valuable a tool for employers to attract and retain top talent. While caps on — or elimination of — the tax exclusion for employer-sponsored health insurance would certainly cause most employers to rethink their compensation and benefits strategy, it’s unlikely that we’ll see immediate and wide-reaching elimination of employer coverage. It will take time for employers, their consultants and brokers and the insurance industry to develop alternative programs that will preserve their competitive positions in the marketplace and meet the needs of their workforces.
Knowing that employer-sponsored health insurance will remain relevant in at least the short- to mid-term, employers must prepare themselves — and their employees —for any changes to come. These are likely to include a renewed emphasis on and interest in high-deductible health plans and health savings accounts, greater focus on cost and quality transparency and, frankly, a transition period of several years while the details of the “replacement” plan get ironed out. That said, we can expect some of the more popular aspects of the current system to stay the same, including coverage of dependents up to age 26 and the elimination of pre-existing condition exclusions.
By understanding these likely changes and taking specific steps, employers can ensure they are ready when Trump rolls out his healthcare plan. These steps include:
1. Understanding and complying with the current system. Until healthcare laws are amended, repealed or replaced, employers need to continue to understand and comply with the requirements and deadlines enacted in the ACA, such as Summaries of Benefits and Coverage (SBCs) and employer shared responsibility reporting (aka ESRR or Forms 1095-B and C). The extended ESRR deadline gives employers all the more reason — and even fewer excuses — to have their materials completed on time and correctly.
- Researching potential changes: There are at least seven different proposals for plans to replace the ACA. Becoming familiar with the provisions of each will give employers a sense of potential changes ahead and what opportunities their companies have to comment on or otherwise shape proposed regulations. With the nomination of Tom Price as Secretary of the Department of Health and Human Services, a review of his “Empowering Patients First” Act, most recently introduced in May of 2015, would provide a good indication of things to come.
- Planning for (an uncertain) future. Employers should schedule meetings with their consultants, brokers and legal counsel to begin discussions about any required or desired benefit strategy and plan design changes for plan year 2018.
While we play the waiting game to see what the future of healthcare will look like, employers would be well served to provide robust education around healthcare basics. Given the current poor levels of health care literacy across America, anything employers can do to equip employees with a working knowledge of benefits plans will serve employees and their employers alike well in the short-term and prepare them to make educated decisions about whatever plans the future may bring.
