What Does the Election of Donald Trump Mean for Employee Benefits?

The election of Donald Trump for President has created more uncertainty for employers in the world of employee benefits, at least in the short term. One thing the experts are saying is that the Form 1095 reporting requirement for 2016 will remain unchanged. President-elect Trump has promised to repeal and replace the Affordable Care Act, but that will take a while. The forms that need to be provided to employees by January 31, 2017, will still be required.

The forms are needed for the IRS to verify whether penalties are due from individuals who did not obtain health insurance or from employers with 50 or more full-time equivalent employees that did not provide health insurance to all of their full-time employees. The penalty for employers is $260 for each Form 1095 that is not filed, and it doubles to $520 per form if there is a blatant disregard for the filing requirements. The penalties need to be collected to fund the premium subsidies that have been paid out during 2016 for individuals who obtained state Marketplace health insurance. 

So what can we expect?

Here are some of the things that are being discussed:

1. Elimination of the current Form 1095 reporting requirements and having an employer certification process whereby the employer is sent a certification form when an employee applies for Marketplace coverage. The employer would certify whether that employee was offered health coverage or not, and that would determine whether the employee is eligible for subsidies on the state Marketplace. (But see #7 below.)
2. Republicans want to get rid of the Employer Shared Responsibility penalty, but it is a funding mechanism for other ACA spending, which all needs to be sorted out.
3. Expansion of health savings accounts is anticipated:
   1. Over-the-counter medications would be allowed to be paid from HSAs.
   2. There would be an increase in the HSA contribution limits.
   3. Tele-health and employer on-site medical clinics would be allowed to be provided to employees without violating the high-deductible limits for the employee’s HSA eligibility.
   4. There would be clarification of the medicines considered preventive so employers could properly design prescription insurance plans to meet the High-Deductible Health Plan definition for HSA eligibility.
   5. Tax-free transfer of HSAs to heirs would be allowed.
4. Once again allow individual health insurance premiums to be paid by employers on a tax-free basis and allow tax-free reimbursement of individual premiums under an employer Health Reimbursement Arrangement (HRA).
5. Cadillac tax should go away but may be replaced with a cap on the employer deduction on a per-employee basis for employee health insurance.
6. The Individual Shared Responsibility requirement to have health insurance would go away, and Trump would work with states to create high-risk pools for individuals who have not maintained coverage.
7. Premium subsidies and tax credits would go away on the state Marketplaces and be replaced by a tax deduction for the purchase of individual health insurance.
8. Trump would promote competition between health insurers by allowing insurers to sell coverage across state lines.
9. Increased price transparency from health care providers so that consumers could shop for health procedures and other services.
10. The expanded Form 5500 filing requirements for retirement plans (additional questions that the IRS and DOL wanted to gather data for audits) and small employer health plans (employers with under 100 employees with health insurance would have to file Form 5500 for the health plan) should be going away.
11. The DOL’s fiduciary rule will most likely not go away. The excessive fee issues will continue to be addressed, but President-elect Trump has a different perspective on enforcement.

There are also discussions about changes to Medicaid and Medicare and prescription drugs. We will have to wait and see what develops in 2017. If you have questions, feel free to contact one of Wipfli’s Health Reform experts Bob Buss, Pam Branshaw, Tom Krieg, Keith Koszarek, or talk to your Wipfli relationship executive.