Healthcare Executive Order Moves to Increase Affordable and Flexible Health Insurance Options for Small Businesses

Date: October 19, 2017

Issued last week, President Donald Trump’s executive order instructs agencies to revised rules that weighed down small business employers’ healthcare offerings.

Late last week, President Donald Trump signed an executive order that directs federal agencies to revise regulations in order to facilitate affordable and flexible health insurance offerings to individuals and small businesses, according to the Washington Post. The executive order specifically advises the revision of rules for “association health plans,” where small businesses can link up through an association to offer health benefits.

Currently, “association health plans” are limited due to strict federal and state regulations. However, the Trump administration is expected to propose allowing plans to be offered more broadly, including across state lines. 

The executive order directs various agencies to examine the potential for expanding association health plans. NFIB has supported the concept of association health plans for many years. It would allow small business owners to purchase health insurance coverage through membership associations. That would create greater market power and be subject to fewer costly regulations, leading to lower premiums.

Many of you have contacted NFIB in the past few days asking about association health plans. NFIB does not currently have such an offering, as the executive order is just the beginning of a process to establish these.

As part of the same executive order, the administration sought to make it easier for small businesses to reimburse employees for the cost of healthcare. Under Obamacare, employers were penalized by the IRS for giving their workers money that they could use to buy health insurance or purchase medical services. NFIB fought to repeal that provision, and in 2016 Congress passed a bill that former President Obama signed, which eliminated the IRS penalties on small employers who reimburse employees. President Trump’s executive order requires agencies to expand these arrangements and clarify regulatory confusion that limits their functionality.

“With these actions, we are moving toward lower costs and more options in the healthcare market, and taking crucial steps toward saving the American people from the nightmare of Obamacare,” said Trump in the ceremony last week.

Many business groups, like NFIB, applauded the president for his bold action to provide “more relief and more freedom” from the Obama administration’s Affordable Care Act system. “In the wake of the Senate’s failure to repeal Obamacare, we are grateful to President Trump for addressing regulations that make it harder and costlier for small business owners to provide healthcare for themselves and their employees,” said NFIB President and CEO Juanita Duggan. Still, Duggan cautioned, congressional action is required to repeal and replace Obamacare. 

According to the New York Times, the executive order also intends to further develop short-term insurance policies that are often used by individuals in between jobs or those who are no longer covered by a parent’s health insurance plan. The Trump administration wants to expand the offering from three months to around one year.

“The cost of healthcare has been the number-one problem for small businesses for more than 30 years,” said Duggan. “NFIB has fought to remove penalties on small businesses for helping their workers buy health insurance, and the President’s action advances that effort.”

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