United States: President Trump's Affordable Care Act Executive Order – Business As Usual For Employer Sponsored Group Health Plans

On his first day in office (January 20, 2017), President Trump signed an executive order to "minimize the economic burden" of the Patient Protection and Affordable Care Act ("ACA") pending its repeal. Although the Order clearly affirms the newly elected President's continued commitment to the repeal of the ACA, its practical significance for employer group health plans remains to be seen, leaving employers with questions regarding what the Order does and does not do, how it impacts their compliance obligations with respect to those plans and what implications it has regarding the "repeal and replacement" of the ACA. These questions are addressed below.

What the Order does and does not do

The Order highlights the new Administration's policy objectives behind the repeal of the ACA – i.e., to minimize the ACA's regulatory burden, afford States more flexibility and control, and create a more free and open healthcare market. It also directs the agencies responsible for the implementation of the ACA to "exercise all authority and discretion" available to them to effect these objectives "to the maximum extent permitted by law", including "waiving, deferring, granting exemptions from and delaying the implementation of" any part of the Act that would impose a financial or regulatory burden on individuals, states, insurers, health care providers and others.

Although the executive directive is very broadly worded, it does not require any specific response by any federal agency. The intended objective of the Order is therefore unclear.

For example, the federal agencies responsible for implementing the ACA could respond to the Order by publishing new regulations or less formal guidance to "un-do" or change existing ACA rules. However, the regulatory process is time consuming due to the abundance of ACA regulation and the public notice and comment requirements to which agencies must adhere when promulgating regulations. Moreover, there is currently a moratorium on regulatory action pending completion of the ongoing transition in federal agency leadership.

Another potential response is for these federal agencies to stay enforcement of certain aspects of the ACA based upon the Order's waiver and exemption provisions. However, those provisions are only available "to the extent permitted by law" and agencies are not generally "permitted by law" to ignore existing ACA statutory and regulatory requirements. Therefore, waivers and exemptions will likely be limited to instances in which the ACA currently allows for them. For example, more leniency could be applied in administering the existing hardship waiver that is available to individuals who fail to secure health coverage and are otherwise subject to a tax penalty.

In any event, the Order is neither intended, nor legally permitted, to repeal the ACA which can only be accomplished by Congressional action (although federal agencies can replace existing ACA regulations and/or interpretive guidance as noted above).

How the Order impacts group health plan compliance obligations

As previously stated, the Order does not include any specific agency directive and it is not clear how the Order's waiver and exemption provisions will be applied by the federal agencies charged with enforcement of the ACA. This includes enforcement of ACA requirements that apply to employer sponsored group health plans. In fact, the Order does not explicitly reference employers or group health plans in the list of individuals and entities that are to receive waivers and exemptions from ACA taxes, fees and penalties – although they could potentially qualify as "health insurers" or "purchasers of health insurance" (which are included in that list). Whether or not the Order is interpreted as applicable to employers and group health plans is a matter that will presumably be determined by the Department of Health and Human Services, Department of Labor and IRS in the near future. Some of the potential group health plan-related ACA taxes, fees and penalties that could be impacted are as follows.

Employer Mandate Penalties. The IRS announced recently that it expects to send letters to large employers in early 2017 to inform them of their potential tax liability for any failure to offer full-time employees and their dependents affordable minimum value health coverage during the 2015 calendar year. These potential penalties would be based upon information that was reported by the employer on IRS Forms 1094-C and 1095-C in 2016. Before sending these letters, the IRS promised to publish guidance describing the penalty payment procedures and to supplement that guidance with other information in order to ensure that employers are properly informed of when and how the IRS will be contacting them. At this point, it is unclear if the Order's waiver and exemption provisions will result in the suspension of this enforcement activity.

Employer ACA Reporting. To the extent that enforcement efforts with respect to employer mandate penalties are suspended, the associated ACA reporting could likewise be suspended. Nevertheless, there is currently no indication that these reporting obligations will be impacted by the Order. Accordingly, employers should plan to issue individual employee statements (Forms 1095-C) by the upcoming March 2 deadline and to file those statements with the IRS (using Form 1094-C) by the applicable deadline (February 28 (paper filing) or March 31 (electronic filing)).

Group Health Plan Related Taxes and Fees. It is conceivable that the $100/day ACA tax penalty that applies to certain group health plan violations (including but not limited to the ACA's contraceptive coverage requirement) may not be pursued as a result of the Order and that the second installment of the transitional reinsurance fee (due in November) as well as the Patient Centered Outcome Research Institute fee (due July 31) could be waived. Again, though, the Order does not (and cannot) accomplish this. Further agency or Congressional action would therefore be necessary to implement any such changes.

Non-discrimination rules for fully insured group health plans and Cadillac tax. The IRS has already suspended enforcement with respect to two ACA provisions affecting group health plans – the non-discrimination rules applicable to non-grandfathered fully insured group health plans and the so-called "Cadillac tax" on employer-sponsored health coverage above certain thresholds. It is presumably safe for employers to assume that neither of these ACA provisions will move forward under the current Administration - irrespective of the Order.

Next steps. Regardless of whether or not the Order ultimately results in less ACA enforcement in the context of employer sponsored group health plans, the Order does not change existing ACA compliance obligations. Therefore, until the impact of the Order is known, or Congressional or agency action changes the existing ACA landscape, employers should continue "business as usual" with respect to their group health plans.

The Order's implications for the "repeal and replacement" of the ACA

In terms of changes to the existing ACA landscape, the Order does not shed any light on the timing of ACA repeal nor the substance of its replacement legislation - although it may put pressure on Congress to act more quickly than it might otherwise have planned. Nevertheless, given that the Administration and Congress have not yet reached a public consensus on replacement legislation, it is difficult to predict how repeal efforts will proceed.

Most recently (on January 13), Congress passed a budget resolution instructing committees to propose legislation by January 27 to repeal the ACA. However, the resolution is not binding, and even if proposed legislation were issued by then, its fate will depend upon various factors that continue to evolve - including the tenuous Senate confirmation of the Administration's nominee to lead the Department of Health and Human Services.

Given the time it could take to hash out the details of ACA replacement legislation, the immediate issue of concern is whether or not to proceed with repeal or to delay it in order to simultaneously "repeal and replace" the ACA – and the substantial consequences associated with each of those alternatives.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Proskauer Rose LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Proskauer Rose LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions