January 22, 2017 by Tony Novak
In his first day in office the president took action to undermine the Affordable Care Act. An executive order on 1/20/2017 directs federal government agencies to “to waive, defer, grant exemptions from or delay the implementation of any provision or requirement of the Act” that they deem to burden individuals, insurers, health-care providers, or states. This post summarizes what that order means to individuals and businesses using Freedom Benefits services.
Increase in insurance options
The Wall Street Journal reports that health insurance companies are moving quickly to market cheaper limited coverage as they did in the years before ACA. The sale of insurance across state lines will likely follow. Normally the sale of health insurance is governed by state law. But the federal government operates a national health insurance sales platform in Healthcare.gov that may be exempt from state law. I will likely encourage more people ho need affordable coverage to look for it in states that offer such coverage.
No enforcement of tax penalties
A small sampling of tax professionals (mostly enrolled agents) in a Facebook discussion group today indicated that most will continue to support AVA individual mandate penalties. WSJ reports “The move appears to lay the groundwork for officials to neutralize penalties for people who go uninsured, potentially by offering widespread exemptions”. Based on the president’s directive, and past discussions among CPA peers, I suspect that many CPAs will not include payment of ACA penalties with tax returns unless additional IRS guidance is provided.
The news isn’t all rosy. The order is likely to disrupt the insurance markets and send guaranteed issue insurance premiums higher. Few or no guaranteed issue policies may be available during the transition period. We will need to wait for more information,