In an executive order issued October 12, 2017, President Trump called for expanded use of and flexibility for health reimbursement arrangements (HRAs) as a means of providing individuals, including employees of small businesses, with more options to finance their health care (see Greater Access to HRAs and Practice Note, Defined Contribution Health Plans: Overview: Health Reimbursement Arrangements (HRAs)). The order also declares a policy interest in expanding access to:

The order includes directives to the Departments of Labor (DOL), Health and Human Services (HHS), and Treasury (collectively, the Departments), as applicable, to propose or reconsider additional guidance to carry out the order's terms.

Within 120 days, the order instructs the Departments to consider proposing regulations or revising existing guidance to:

Under Obama Administration guidance, HRAs that are not integrated with group health plan coverage generally do not satisfy the Affordable Care Act's (ACA) market reforms (see Practice Note, Defined Contribution Health Plans: Health Reimbursement Arrangements (HRAs)).

Citing increased health insurance premiums under the ACA, the order also declares that it is the Executive Branch's policy (to the extent consistent with law) to facilitate the purchase of insurance across state lines (see Practice Note, Affordable Care Act (ACA) Overview). According to the order, one-third of US counties have only one insurer offering coverage on the applicable government-run health insurance exchange for 2017 (see Article, Health Insurance Exchange and Related Requirements Under the ACA).

The order suggests that large employers, owing to their larger pools of insurable individuals, can obtain better terms on health insurance relative to smaller employers. The Trump Administration believes that expanded access to association health plans (AHPs) (whether insured or self-insured) will help small employers overcome this barrier and secure more affordable health care than is available under the ACA. As a result, the order directs the DOL – within 60 days – to consider proposing regulations or revising existing guidance to expand access to health coverage by allowing more employers to form AHPs. Specifically, the order instructs the DOL to consider:

Noting that STLDI is exempt from the ACA's "onerous and expensive" market reforms, the Trump Administration order states that STLDI is an affordable alternative to ACA health exchange coverage for individuals who do have access to employer-sponsored health coverage.

Final regulations issued by the Departments in October 2016 under the Obama Administration defined STLDI as health insurance:

(29 C.F.R. § 2590.701-2.)

Under this definition, as the Trump order notes, the Obama Administration restricted access to STLDI by reducing the allowable coverage period from less than 12 months to less than three months (see Legal Update, Tri-Agencies Draw the Line on Short-Term, Limited-Duration Insurance). The October 2016 final regulations also included a notice requirement under which individuals were required to be informed that STLDI was not minimum essential coverage for purposes of the ACA's individual mandate (see Practice Notes, Affordable Care Act (ACA) Overview and Employer Mandate Under the ACA: Overview: Minimum Essential Coverage).

Within 60 days, the Departments are directed to consider proposing regulations or revising guidance to expand the availability of STLDI (including, if possible, allowing STLDI to cover longer periods and be renewed by the individual).

Although not expressly referenced in the Trump order, qualified small employer health reimbursement arrangements (QSEHRAs) were included as part of recent legislation to expand the use of HRAs (21st Century Cures Act (Pub. L. 114-255); see Legal Updates, Legislation Addresses Mental Health Parity, Eating Disorders, HIPAA, and HRAs for Small Employers and Rules for QSEHRAs, EPPs, and HRAs at Issue in Latest FAQ Guidance). Given the Trump Administration's specific policy impetus to expand HRAs, it seems likely that we will receive additional implementing guidance on QSEHRAs in the coming months.

In another health care development, the Trump Administration announced that it will no longer reimburse insurers under the health exchanges for cost-sharing reductions required under the ACA for individuals who buy a silver metal tier plan on an ACA exchange. As background, the ACA requires insurers offering qualified health plans through the ACA health exchanges to reduce deductibles, coinsurance, copayments, and similar charges for eligible insured individuals enrolled in their plans (ACA § 1402). Congressional bills to replace the ACA, which were considered but not ultimately enacted, would have repealed the cost-sharing subsidies (see Article, ACA Repeal-and-Replace Bills in the House and Senate).