Last Friday, one of President Donald Trump’s first actions in office was to make good on a campaign promise to move quickly to repeal the Affordable Care Act (ACA). He issued Executive Order 13765, Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal. The one-page executive order (EO) is effective immediately and very light on details, with the goal to minimize the financial and regulatory burdens of the ACA while its repeal is pending. The EO directs the Executive Branch agency heads (those in the departments of Labor, Health and Human Services, and the Treasury) in charge of enforcing the ACA to “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”
While Congress works on the ACA repeal through budget reconciliation, which allows for quick consideration of tax, spending, and debt limit legislation, President Trump is tackling the regulatory enforcement actions of the law. The practical impact of the EO is limited to agency enforcement discretion and requires agencies to implement the EO in a manner consistent with current law, including assuring that any required changes to applicable regulations will follow all administrative requirements for notice and comment periods.
The bottom line is that until the agency heads in Labor, Health and Human Services, and the Treasury are confirmed and take charge of their departments, there will probably be little change in agency enforcement action right away. The broader changes to amend or repeal the ACA will take even more time to implement.
What Employers and Plan Sponsors Should Know Now
While the EO does not specifically refer to the ACA compliance burdens on employers or plan sponsors, such as the employer or individual mandates, required health benefits coverage, reporting or employee notification requirements, the language addresses the actions that the federal agencies can take to soften enforcement until the repeal is accomplished. It does direct the government to address the taxes and penalties associated with the ACA. So what does that mean for employers and plan sponsors now?
IRS employer reporting delay? Not yet. The top concern of employers is whether or not those subject to the shared responsibility provisions of the law would need to submit their 1094/1095 reports of coverage to the IRS by February 28 (or March 31, if filing electronically) and provide their employees with individual 1095-C statements by March 2. These reports are essential for the IRS to assess penalties under the law, and this reporting has been a burden for employers. Unfortunately for employers, the order did not mention delaying or eliminating this reporting requirement.
What employers should do now:
- Applicable large employers (ALEs) subject to the employer mandate should plan to comply with their 1094/1095 reporting obligations this year.
- All employers should continue to comply with all current ACA requirements until there is further guidance from the lawmakers.
We’ve Got You Covered
We’ll be monitoring President Trump’s actions to reduce regulatory burdens on American businesses along with Congressional legislative actions that can impact your business operations. Look for ThinkHR’s practical updates where we’ll analyze these developments and break them down into actionable information you need to comply with the changing laws and regulations.