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Executive order on health plans could expand access to association health plans, change HRA rules

On Thursday, President Trump signed an executive order urging the Department of Labor to consider expanding access to association health plans, including small businesses and individuals. This could potentially allow American employers to purchase health insurance across state lines. The executive order also urges the Departments of Labor, Health and Human Services, and Treasury to consider changing health reimbursement account (HRA) rules, as well as consider expanding coverage through low-cost short-term limited-duration insurance policies.

There is no immediate impact of this executive order. Employers, small business owners, and association plan participants should continue operating under current laws and stay tuned for further legal developments. 

Association Health Plans Potentially Not Subject to Affordable Care Act Requirements

Association health plans are currently governed by state laws and generally consist of trade organizations or interest groups. The executive order urges expanding access to association health plans, including small businesses and individuals.

Additionally, the Department of Labor could amend the regulations so that association health plans would no longer be subject to State regulation or Affordable Care Act requirements, potentially allowing American employers to purchase health insurance across state lines.  This could also allow association health plans to deny coverage to the group or set rates based on the medical history of those in the group, so plans with younger, healthier members could offer lower premiums.

HRAs: Potential Use to Pay for Individual Policies

The executive order urges changes to health reimbursement accounts, potentially allowing employers to give workers funding to pay premiums for health policies in the individual market. Affordable Care Act regulations explicitly forbid the practice, but that could potentially change, here.

Short-Term Limited Duration Insurance Policies

The executive order urges expanding coverage through low-cost short-term limited-duration insurance policies, including lengthening the coverage period, currently limited to 90 days, and allowing renewals of the policies. These plans are not subject to Affordable Care Act requirements and generally exclude pre-existing conditions and provide less comprehensive coverage than other policies.

Looking Ahead 

First, there is no immediate legal effect from this executive order. Any changes to law would be made through regulations from the above named agencies. Additionally, many states have expressed intention to file lawsuits against this executive order and its potential outcomes. Employers, small business owners, and association plan participants should continue operating under current laws and stay tuned for further legal developments.

Editor's note: The above analysis is courtesy of Pope Law Firm

New regulations will allow many more employer exemptions from covering contraceptives

Last week, the U.S. Departments of Treasury, Health and Human Services, and Labor released final interim regulations outlining expanded exemptions for group health plans regarding contraceptive coverage. Employers with religious or moral objections to contraceptive coverage may be exempt from the Affordable Care Act’s requirement that group health plans provide contraceptive coverage. These new regulations are effective immediately. Simultaneously, the Centers for Medicare and Medicaid Services issued guidance pertaining to abortion coverage. This guidance applies only to individual insurance policies offered in the Exchanges.

ACA requires contraception coverage with no copay

The Affordable Care Act requires non-grandfathered group health plans, except houses of worship and closely held companies with sincerely held religious objections, to cover contraceptives without cost-sharing requirements. Plans and issuers must cover, without cost-sharing, the full range of FDA-identified methods. Thus, plans and issuers must cover, without cost-sharing, at least one form of contraception in each of the 18 distinct contraceptive methods identified by the FDA.

For the hormonal contraceptive methods, coverage therefore must include (but is not limited to) all three oral contraceptive methods (combined, progestin-only, and extended / continuous use), injectables, implants, the vaginal contraceptive ring, the contraceptive patch, emergency contraception (Plan B / Plan B One Step / Next Choice), emergency contraception (Ella), and IUDs with progestin. Accordingly, a plan or issuer may not impose cost-sharing on the ring or the patch.

Religious exemption expanded and new ‘moral conviction’ exemption added

The new interim final rules expand which entities may claim a religious exemption, and the new rules add a "moral conviction" exemption to the contraceptive coverage requirement.

Previously restricted to only houses of worship and closely held companies, the first rule allows both nonprofits and for-profit employers (including publicly traded companies) to qualify for an exemption and drop contraceptive coverage from their plans, based on an objection to contraceptive coverage founded on religious beliefs.

The second rule adds a moral conviction accommodation, and allows all employers, except publicly traded companies, to qualify for an exemption and drop contraceptive coverage from their plans, based on an employer’s moral objection to contraceptive coverage.

Notice required

If an applicable employer is exempt from the Affordable Care Act’s contraceptive coverage requirement, it must provide notice to employees and participants of the plan if the plan previously covered contraceptives and will no longer cover them.

In some cases, applicable employers will be required to notify the federal government of their objections.

Contact us 

Have questions regarding the regulatory changes in this Alert? Then, please contact a Plexus client service team representative in Deer Park, Ill. (847-307-6100), Chicago (312-606-4800), Dallas (972-770-5010), or Oklahoma City (405-840-3033). We’re here to help – and we’re happy to help.