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What The Trump Election Means for the ACA

What the Trump Election Means for ACA

Now that Donald Trump has won the presidency with a majority Republican House and Senate, what does the future of the Affordable Care Act (ACA) look like? During the campaign, Donald Trump supported Republican Congressional efforts to “repeal and replace” the law with an alternative health care plan. Will he push through with his campaign pledge?

While it's too early to tell what will ultimately happen, the ACA is likely to undergo significant changes. The following high level points reflect what we think will happen to the ACA and how the changes may impact your company and your health care strategy.


Excise Tax on Employer Plans

Independent of the outcome of the election, both sides of the aisle in Congress and both Presidential candidates supported elimination of the excise tax on employer-sponsored health benefits that is set to take effect in 2020 after having been delayed for two years by the outgoing Congress. We may see progress on repealing it in 2017.

Insurance Market Reforms and Other Popular Provisions

Though the rhetoric may be “repeal and replace,” in actuality, support for most of the insurance market reforms and other popular aspects of the ACA, like the requirement to cover adult children up to age 26, are likely to continue. 

Employer Mandate

There is an increased likelihood that the employer mandate, the individual mandate, and health care taxes that were part of the ACA may be repealed.

Employer Plan Reporting and Other Administrative Requirements

If the employer mandate is repealed, it would eliminate the risk for employer penalties, and remove the tracking, reporting and other administrative burdens tied to it.

State Health Insurance Exchanges

If the state exchanges are eliminated, there will likely be a phase-out period of a few years and a transition to potential eligibility for tax credits for coverage on an individual market less tied to state regulatory requirements and more governed by national requirements for people who are not offered employer or other group coverage.

Health Savings Accounts and Flexible Spending Accounts

The likelihood for reducing restrictions and enhancing the flexibility of rules for contributions and distributions for both HSAs and FSAs is more favorable.

Payment and Delivery Reforms

Though Congress may increase oversight and its authority over the ability of CMS to continue and expand payment and delivery reforms in Medicare, ACOs and other reforms are likely to continue.

Taxation of Health Benefits for Individuals

The odds for an agreement on tax reform, including corporate tax reform, and likely consideration of capping the individual income tax exclusion for health benefits increases, although the latter remains unclear whether it will succeed. 

Tax Treatment of Health Coverage for Employers

There is not likely to be any discussion of reducing employers’ tax advantages for employer-sponsored coverage, the discussion would only affect employees’ potential income tax obligations.


MEMBERS—If you missed today's webinar on this topic and would like more detail, you can view the slides here. A recording will also be available next week.