Health Care Via Trump What Does It All Mean
Just a few weeks ago, Donald Trump claimed victory over Hillary Clinton in the 2016 Presidential election. The election of a new President always brings about changes, but because Trump’s campaign continuously mentioned the need for healthcare reform, many human resource professionals began to wonder what the new President had in store for employer benefits.Although nothing is set in stone quite yet, here are some of the changes that could take place once President-Elect Trump is sworn into office:
REPEALING THE AFFORDABLE CARE ACT
Trump mentioned time and time again he would repeal the Affordable Care Act (ACA) once he was in office. But, the decision to do so is not his to make. In order to successfully repeal ACA, he will most likely need the votes of at least 60 senators to close the filibuster that the Democrats will initiate to stall the legislation. It’s unlikely Trump will be able to secure 60 votes, which will force him to turn to modifying the existing act instead of repealing it altogether.
ELIMINATE THE CADILLAC TAX
The Cadillac Tax, which is currently set to go into effect on January 1, 2020, is an excise tax on employers who offer their employees high value health care plans. To avoid having to pay the 40% tax, companies will have to scale back what they offer to their employees, which could mean higher deductibles, less coverage, and health savings account caps. It is likely that this tax will be completely eliminated before its proposed start date, and as of now, it is believed both Democrats and Republicans will support this change.
STABILIZE THE HEALTH INSURANCE MARKET
More than 20 million people are currently insured through the Health Insurance Market, and it would be irresponsible of Trump to leave these individuals without insurance if plans to repeal ACA do go through. However, changes must be made in order to make the market a success. Right now, insurance companies such as Aetna, UnitedHealth and Humana are leaving the market, which means consumers do not have much of a choice when it comes to picking an insurance plan. In fact, a report published by the Kaiser Family Foundation found approximately one in five counties will now only have access to one insurance provider through the market. For this to work, Trump must either make adjustments to the current set up or provide another way for these consumers to get access to more choices.
IMPACT ON BUSINESSES
The ACA requires companies with 50 or more full-time workers to provide health benefits that meet specific high standards to their employees. Companies that do not comply with this law are forced to pay $2,000 per worker to the IRS. Although the law was put in place to ensure all employees have access to health benefits, it has inadvertently put a huge burden on small businesses that cannot afford the rising health insurance costs. Many businesses were forced to cut back on other benefits to cover the higher costs of paying for more benefits for all of their employees. For example, some businesses no longer provided coverage to part-time employees while others completely eliminated coverage for employees’ spouses. Because of this unbearable burden, many small business owners are hoping part of Trump’s reform will be throwing some of these mandates out the window.
Trump has promised up to six weeks of paid maternity leave to every mother with a newborn child who does not already receive this benefit through her employer. According to his official plan, funds from the unemployment insurance program will be used to finance this benefit for new moms. If this change does take place, employers must prepare for leaves, especially if this six weeks can be combined with the twelve weeks of unpaid leave guaranteed under the Family and Medical Leave Act.
ALLOW SALES ACROSS STATE LINES
Trump has also pledged to modify the current law to allow health insurance companies to sell to all customers regardless of what state they are in. By doing so, he expects there to be more competition in the market, which will force companies to lower their prices and offer more attractive plans. If this is the case, employers may find individuals choosing to purchase a plan from the market instead of enrolling in the employer-sponsored plan. However, many people are skeptical of this plan as there are not many regulations in place that restrict interstate sales of health insurance. Most insurance companies that do not sell to other states have made this choice because of financial reasons, not because there are restrictions in their way that prevent them from doing so.
HEALTH SAVINGS ACCOUNTS
Throughout his campaign, Trump discussed his desire to promote consumer involvement with health savings accounts (HSAs) by expanding tax incentives for those who choose to enroll. By encouraging consumers to enroll in HSAs, Trump is also promoting high-deductible health insurance plans. If tax incentives for participating in HSAs are put in place, employers will have to consider offering these plans if they don’t already do so. However, even Trump admits HSAs are not attractive to everyone. The President-Elect states on his website, “These plans are particularly attractive to young people who are healthy and can afford high-deductible insurance plans.”
WHERE DO EMPLOYERS STAND TODAY?
For right now, it’s business as usual for employers. It took President Obama over two years to pass the ACA, and it’s expected Trump will face some of the same delays when attempting to pass any new healthcare legislation.
Changes, if and when they do come, will be introduced slowly and with plenty of warning, so there’s no reason to panic…but there is reason to stay informed and pay attention – Trump was unpredictable in the election – he’s bound to surprise us as President!