President-elect Trump has stated repeatedly that one of his initial goals is to repeal and replace the Affordable Care Act (the “ACA”).  Because the Republicans control both houses of Congress, it seems likely that a repeal of some or all of the ACA will take place.  The Republicans do not have 60 seats in the Senate to prevent a filibuster; therefore, it is likely they will start by repealing the revenue provisions of the ACA through the reconciliation process, which requires only a majority vote.  This means that the Cadillac tax, the medical device tax, the employer mandate, the individual mandate, premium tax credits and the Medicaid expansion could likely be repealed early in the Trump Administration.   It remains to be seen what Congress will do with the ACA’s market reforms, many of which are very popular with consumers, such as covering adult children to age 26 and prohibiting pre-existing condition limitations.

It is unclear how the new administration will deal with the approximately 22 million Americans who may lose access to coverage as a result of the repeal of the ACA.  The administration has signaled that there will be a two or three-year transition period while the Health Insurance Marketplace is dismantled. 

The outlines of a “replacement” plan are less clear.  Mr. Trump’s website on transition issues for healthcare states that some of the ideas being considered include:

§  Expansion of Health Savings Accounts;

§  Allow health insurers to sell insurance across State lines;

§  Establish high risk pools for individuals with significant medical issues; and

§  Give States block grants for Medicaid.


Putting all the speculation aside, what should an employer do now?  It is clear that the ACA is the law of the land for 2016. Therefore, employers should not make any material changes to health plans for 2017 until more is known.  Employers should also go forward with ACA reporting for 2016 as any changes to the law may not be retroactive.


If you have any questions, please contact Cyndi Moore in the Troy office at 248-433-7295 or any other member of the Employee Benefits team.