2016 Election Results: President-elect Donald Trump and the ACA

 November 11 2016     Shelly Hodges-Konys

In light of the 2016 presidential election results, we are left wondering what we can expect moving forward especially as it relates to Health and Welfare Benefits. President-elect Trump ran on a platform of “Replace and Repeal” of the Affordable Care Act (ACA). However, the process to repeal and replace the ACA will take time and nothing will happen between now and the New Year. It is too early to tell how all of this will play out. Open enrollment is currently underway in the Marketplaces across the country and it is expected that individual policies (and subsidies for lower and middle-income individuals) will be available to enrollees as of January 1, 2017. Additionally, employers are preparing and implementing their 2017 renewal decisions.

Right now, nothing has changed. Employers should be prepared to comply with the requirements of the ACA. These include:

  • The employer mandate (for applicable large employers with 50 or more full-time equivalent employees);
  • Reporting offers of coverage made in 2016 on Form 1094-C and 1095-C;
  • Payment of ACA taxes and fees (PCORI, TRP, etc.);
  • Any plan design changes applicable to plan years that begin on or after January 1, 2017.

It is anticipated that acting on the campaign promise “Replace and Repeal” will be one of the top priorities of the new administration. It is also anticipated that legislative changes may be easier than they might be otherwise with Republicans holding the majority in both chambers of Congress.

President-elect Trump's policy initiatives have seven main components:

  • Repeal the ACA.
  • Allow health insurance to be purchased across state lines.
  • Allow individuals to fully deduct health insurance premium payments from their tax returns.
  • Allow individuals to use health savings accounts (HSAs) in a more robust way than regulation currently allows.
  • Price transparency required from all healthcare providers.
  • Block-grant Medicaid to the states removing federal provisions on how Medicaid dollars can and should be spent by the states.
  • Remove barriers to entry into the free market for the pharmaceutical industry including consumer access to imported drugs.

With these points in mind, the process of repealing a law is the same as creating a law. Repeal can be a simple repeal, or legislators can try to pass legislation to repeal and replace. Bills can begin in the House of Representatives, and if passed by the House, they are referred to the Senate. If it passes the Senate, it is sent to the President for signature or veto. Bills that begin in the Senate and pass the Senate are sent to the House of Representatives, which can pass (and if they wish, amend) the bill. If the Senate agrees with the bill as it is received from the House, or after conference with the House regarding amendments, they enroll the bill and it is sent to the White House for signature or veto.

Although Republicans hold the majority in the Senate, they do not have enough party votes to allow them to overcome a potential filibuster. A filibuster is when debate over a proposed piece of legislation is extended, allowing a delay or completely preventing the legislation from coming to a vote. Filibusters can continue until "three-fifths of the Senators duly chosen and sworn" close the debate by invoking cloture, or a parliamentary procedure that brings a debate to an end. Three-fifths of the Senate is 60 votes.

Therefore, there is greater potential to dismantle the ACA by using a budget tool known as reconciliation, which cannot be filibustered. If Congress can draft a reconciliation bill that meets the complex requirements of our budget rules, it would only need a simple majority of the Senate (51 votes) to pass.

The likelihood of any of these initiatives remains to be seen, but with a Republican President and a Republican-controlled House and Senate, some level of change is to be expected.