Open enrollment unlikely to be affected by Trump healthcare order
Ever since President Donald J. Trump signed an executive order Thursday designed to expand health insurance options for some Americans, advisers have been fielding client calls, explaining its potential implications to their employees.
Mark Johnson of Creative Benefit Solutions is no different. EBA spoke with Johnson to learn how he is communicating with clients about the action and the need for ongoing updates. What follows is an edited version of the conversation.
Under Trump’s order, small employers would potentially be able to band together from across the country to create association health plans and buy insurance through those plans outside of the Affordable Care Act. The order also calls for expanding the availability of low-cost, limited, short-term insurance plans, as well as the use of health reimbursement accounts, a tax-advantaged option to pay for healthcare expenses.
EBA: What are the most immediate impacts of the order; do you anticipate it will impact Q1 open enrollment?
Johnson: I think the HRA is a good vehicle for an account-based strategy. We make that recommendation as often as possible, and it is probably one of the more frequently recommended products that we offer to our customers in setting up their health insurance benefits.
HRAs became an intricate part of health insurance when the marketplace increased out-of-pocket exposure to the employee. The HRA is a good vehicle to overcome some of the issues around the structure of health insurance that has been evolving over the last 10 years.
Relaxing some of the regulations is a positive thing for both the employer and employee. I can’t see any negative side to using HRAs other than [lack of] education and understanding [about the products].
EBA: What are the potential effects of loosening of rules surrounding the issuance of health plans by employers?
Johnson: Setting up associations is a practice that exists today, so I’m curious to know more about that particular part of the executive order. The details are really gray. There is not a lot of direction on how that is going to flow.
Crossing state lines and allowing employers to form associations is complex due to state regulations
How does this EO impact enrollment in short-term health insurance plans?
Johnson: Short-term medical is typically for those that have lost coverage or an entrepreneur moving between companies. Just as the name indicates, it serves a specific need around needing coverage for a short window of time to get you from one place to another. There are some restrictions under the current law that you can only have short-term medical for a limited amount of time. Expanding that and giving people more time to find the best solution for them, I see that as a positive. But I don’t see it being something earth shattering that will lower cost for all Americans. It’s not that great of a solution for anything that is complicated in healthcare.
How should advisers be communicating these changes to small business clients?
Johnson: You have to make sure they understand the pros and cons of HRAs. They need to understand how to use an HRA to their benefit, which requires communication. Our goal is to make sure our employer groups explore all of their options.