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This periodic e-newsletter is provided to keep conference benefits officers and other United Methodist Church (UMC) employer representatives informed about the Affordable Care Act (ACA) and evolving health care landscape—and the impact on you as an employer/plan sponsor. Please share this Health Care Reform Update with church administrators and others in your annual conference or organization. Contact Wespath Benefits and Investments at healthcare_reformupdate@wespath.org with article ideas or if you would like to share your organization’s experience in a future issue.
SPECIAL EDITION
ACA Executive Order—Key Considerations
On January 20, 2017, President Trump signed an executive order with respect to the Affordable Care Act (ACA). Below are some key considerations regarding this executive order:
- The executive order directs the heads of governmental agencies to use any discretion available to them to waive, defer, delay and grant exemptions from provisions of the Affordable Care Act (ACA) that create taxes, penalties or regulatory burdens for individuals, insurers and others. The text of the order is available at whitehouse.gov/the-press-office.
- The amount of discretion available to the agency heads depends on the particular provision of the ACA in question. Existing law and regulations contain provisions for exemptions from certain requirements and provisions for agencies to waive penalties that would otherwise apply. Therefore, the IRS could choose to be more generous in its waiver of penalties if the waiver is already allowed under existing law and regulations.
- To take action differing from current final regulations, however, would require a process imposed by the Administrative Procedures Act which requires publication of new proposed regulations and a period for interested stakeholders to comment, prior to the regulations becoming final. This process typically takes several months.
- Under current law and regulations, for example, an individual can claim a hardship exemption under certain circumstances from the ACA requirement to obtain health coverage (the “individual mandate”). However, in order to add additional circumstances under which an individual can qualify for this exemption, the Administration would need to propose new regulations.
- Another example is that current regulations allow providers of coverage to obtain a waiver of penalties for failing to file reports of coverage (e.g., Sections 6055 and 6056 reporting) on time where the failure is due to reasonable cause. This waiver could be extended by the IRS applying more generous criteria as to what constitutes “reasonable cause”; however, new regulations would be required to waive penalties for failing to file reports for no reason.
- The next steps will depend on how the different agency heads respond to the executive order, and the agencies’ interpretation of how much discretion they have. Additionally, it is important to note that the nominated heads of some agencies with authority over ACA regulations, such as the Department of Health and Human Services, are still awaiting confirmation by the Senate, which could further delay any action agencies may take to relieve burdens.
While there are a number of other ACA-related bills and proposals up for discussion in Congress, President Trump’s January 20 executive order is the only definitive action to date, and even this order may pose only minimal changes in how various agencies act. Further, any ACA change may also be delayed until after new agency leadership is confirmed.
Wespath continues to monitor ACA-related activity and will provide analysis and updates as more becomes known about the direction the new Administration and Congress will take.
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Disclaimer: This e-newsletter is provided by Wespath Benefits and Investments as a general informational and educational service to its plan sponsors, the annual conferences, plan participants and friends across The United Methodist Church. It should not be construed as, and does not constitute, legal advice nor accounting, tax, or other professional advice or services on any specific matter; nor do these messages create an attorney-client relationship. Readers should consult with their counsel or other professional adviser before acting on any information contained in this newsletter. Wespath expressly disclaims all liability in respect to actions taken or not taken based on the contents of this newsletter.
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