President Trump has been frustrated for months at the CR (Congressional Republicans) for their inability to repeal-and-replace Obamacare, despite consistent efforts and several attempts. Therefore, Mr. Trump decided to take things in his own hands. Last week, he announced new federal rules and executive actions under HCEO (Health Care Executive Order).
These rules and actions aim to dismantle Obamacare; and needless to say, they will impact the corporate world significantly. From employers to employees, everyone will be affected for better or for worse is yet to be determined.
Let’s take a look at 3 of the many ways HCEO aims to change the healthcare system:
1. Ending of the Cost-Sharing Reduction Subsidies
Also referred to as CSRs under Obamacare, these subsidies provided affordable healthcare to Americans with low income. The federal government compensated insurers through CSRs, if they reduced the out of pocket costs of customers with low income.
However, under Trump’s Health Care Executive Order this will come to an end. Analysts believe that this decision will create a big turmoil in the marketplace as insurers will raise premiums to make up for the difference. It is anticipated that elimination of CSR payments will increase premiums by 28% on average in 2018 and nearly 25% by 2020.
2. Changes to the Association Health Plans
Under Obamacare, small businesses could join together and buy insurance at cheaper premiums. Additionally, all healthcare associations were mandated by the law to offer essential healthcare benefits like hospital care, prescription drug coverage and maternity care. But this is likely to change under HECO as it instructs agencies to rewrite association health plans.
Under HECO, these plans can expand and are going to be characterized as ‘large employers,’ which were subjected to a set of different rules in Obamacare. The association health plans under the new order will be able to provide skimpier healthcare plans at cheaper rates. These plans will be attractive for employers recruiting young and healthy individuals in their workforce. However, remaining businesses in the ACA or Obamacare’s marketplace will perhaps keep customers who are elderly and sick, which insurers will find unattractive as it will cost more.
3. Rolling Back the Mandate Related to Birth Control
Under Obamacare, all healthcare insurance plans were required to cover birth control including IUDs, contraceptive pills, etc., without any out of pocket cost. However, this mandate under Trumps HCEO will be rolling back. This will give employers the flexibility to offer or not offer coverage for birth control to women employees. On the other hand, women employees will have to bear a high cost if their employer chooses not to cover contraception. This can have a ripple effect as women employees may then want to switch companies and work with an employer that covers birth control. Also, it can lower their motivation and morale at work, result in employee disengagement and dissatisfaction.
For more information on Trump’s HCEO and how it will impact employers in the US, get in touch with us today. Call us on (877) 355-6070 or email us at info@jsbenefitsgroup.com. Our team of friendly and experienced benefits experts will provide you all the information and assistance that you need.
