Donald Trump has been elected as the 47th president of the United States, earning a second term in office. The Republican party also won a majority in the Senate and the House.
Immediately following the election, we outlined what a Trump presidency could mean for the Affordable Care Act and ACA compliance at large.
As noted in that blog, the ACA is expected to remain intact under Trump. However, there could be substantial tweaks based on his vow to improve affordability, which will have compliance ramifications.
Why the ACA Is Here to Stay
Trump has backed off his belief the ACA needs to be repealed and instead pivoted toward finding ways to improve the ACA in ways that will lower costs. As the Wall Street Journal notes, Trump has also vowed to protect Medicare and bring down healthcare costs overall.
The reason for this is the widespread use and popularity of the healthcare law. Last fall, ACA health coverage through state and federal marketplaces reached a record-high participation of over 21 million. What’s more, previous analyses have shown that more than 50% of individuals enrolled in ACA health plans and receiving PTCs are in Republican districts.
The ACA has also substantially lowered costs for people aged 50 and older — a key voting demographic. Additionally, in the years leading up to the passage of the ACA, about 14-16% of people in the United States were uninsured (across all ages), according to KFF. By 2023, the uninsured rate had fallen to a record low of 7.7%. Most of the gains in insurance coverage have come from the ACA’s expansion of Medicaid, followed by the creation of the exchange markets.
Trump has shown an interest in improving healthcare. He attempted to pioneer price transparency in medical costs during his first term, and is expected to focus that energy on improving the ACA in this next term. The cost of prescription drugs were lowered for the first time in 51 years under his presidency.
“On affordability, I’d see him building on the first term,” Brian Blase, who served as a Trump health adviser from 2017 to 2019 told NPR. Relative to a Democratic administration, he said, there will be “much more focus” on “minimizing fraud and waste.”
Lastly, in 2023, federal subsidies for health insurance are estimated to be 7% of the U.S.’s gross domestic product (GDP). That is expected to rise to 8.3% by 2033 if it remains intact. Thus, there’s viable economic reasons for the new administration to keep and enhance the healthcare law.
Additional Compliance Requirements Possible
There’s a version of a Trump presidency that could actually lead to additional ACA compliance requirements for employers. Some Republican lawmakers have suggested changing the marketplaces to improve the quality and affordability of plans. This could include a change in Medicare coverage under the ACA.
Alex M. Azar II, the former health and human services secretary under Trump, told the New York Times that a future Republican administration would likely pursue more “technocratic” adjustments to the ACA — a reflection of how difficult it would be to unwind the law.
The Paragon Health Institute, a conservative think tank, outlined a proposed ACA reform policy to combat a rise in fraudulent enrollment in ACA exchange plans:
- Congress should permit the enhanced subsidies to expire after 2025;
- Congress should raise subsidy recapture limits to reduce incentives for people to misestimate their income;
- Congress or the next administration should limit automatic re-enrollment into exchange plans and end it for people moving from or into fully-taxpayer subsidized plans;
- Congress should appropriate cost-sharing reduction payments and prohibit silver-loading;
- Congress should conduct aggressive oversight of the Biden administration’s management of HealthCare.gov, enhanced direct enrollment, and insurer and broker actions to take advantage of misestimating income;
- Congress or the next administration should reverse policies of the Biden administration that enabled such widespread fraudulent enrollment, particularly the continuous open-enrollment period for people who report they have income below 150 percent FPL.
While it’s difficult to project the compliance ramifications of such a plan, it could:
- Narrow furnishing deadlines;
- Update affordability safe harbors;
- Change Minimum Value under the Employer Mandate;
- Lead to additional state requirements.
Just as abortion laws have been left up to individual states, certain aspects of ACA compliance could become more prominent at the state level under Trump. This is something to keep an eye on in the first year of Trump’s second term in office.
Remain Vigilant with Existing ACA Compliance
What is clear is that the ACA’s Applicable Large Employer Mandate under IRC 4980H is not going anywhere. This means that employers with at least 50 Full Time Employees (including Full Time Equivalents) must continue to:
- Measure their workforce monthly to accurately identify ACA Full Time employees;
- Ensure that >= 95% of Full Time employees receive an offer of health coverage that is (a) affordable, and (b) meets minimum value cost-sharing requirements;
- Report to the IRS annually (generally March 31st reporting deadline) using IRS forms 1094-C and 1095-C. Employers report to the IRS on how well they complied with requirements 1 & 2;
- Distribute 1095-C forms annually (generally by March 2nd) to applicable individuals notifying the individual as to their (a) FT status, and (b) benefits eligibility and enrollment status by month.
If you need assistance with ACA compliance and the subsequent year-end filing, contact Trusaic.
Our comprehensive ACA Complete software offers all the resources employers need to achieve full ACA compliance and eliminate penalty risk.
