What President Trump’s First ACA-Related Executive Order Really Means

As expected, within hours of his inauguration as the 45th President of the United States, Donald Trump issued an executive order regarding the Affordable Care Act (ACA), which he and other Republicans have opposed since its inception.

Media reports regarding the order have varied widely, largely because political reporters understand the federal lawmaking process very well, but are generally unfamiliar with the federal rulemaking process.

What’s the difference? Well, the federal lawmaking process is the one most reasonably-informed Americans understand: Congress passes a bill, the president signs the bill, and it then becomes a law (people of a certain age might remember a “Schoolhouse Rock” explanation of this process.

Once a bill becomes a federal law, however, another process begins, and that’s the federal “rulemaking” process. Basically, one or more federal agencies start writing rules explaining how to comply with the new law, how it will be enforced and so on.

It is common for Congress to grant wide latitude to these agencies in terms of interpreting and enforcing the laws it makes, and that includes wide latitude in the rulemaking process. The ACA is no different, putting three federal agencies—the Internal Revenue Service, the Department of Labor, and the Department of Health and Human Services—in charge of the rulemaking process for almost all of its provisions. All of the agencies operate within the Executive Branch, and so they are ultimately answerable to the president.

Congress approved the ACA on a party-line vote, and its wide latitude granted to these agencies was fine with the Democratic legislators who supported the ACA, because then-President Barack Obama was also a Democrat and the ACA was his signature legislative achievement, and therefore the agencies would follow his lead.

The election of anti-ACA Republican Donald Trump, however, turned all of this on its head. Where President Obama took advantage of the ACA’s granting of broad authority for his policy purposes, President Trump will now do the very same—but in the opposite direction.

And that—for all intents and purposes—is what this executive order signals. The order itself dictates nothing particularly specific, which is why we are getting so many different interpretations of it. Essentially, it orders the agencies in charge of enforcing the ACA to do whatever may be within their power under the ACA to slow things down while Congress puts together the ACA’s replacement.

In layman’s terms, the order more or less says “don’t bend over backwards to enforce the ACA because something new is coming down the pike.” In this way, President Trump’s order was largely a symbolic act, signaling to his supporters that he intends to follow through on his promise to gut the ACA and replace it with an alternative as soon as possible. It was also a thinly veiled swipe at Trump’s predecessor, who was accused by many Republicans for abusing his executive authority. President Trump’s message was that he is going to use the same tools President Obama did in any way, shape or form available, not to support the ACA, but to kill it outright.

So, what’s next? Expect to hear from these agencies over the next few days and weeks as they announce various waivers, delays and the like with regard to ACA enforcement. That’s where the specifics will come from. They now have their marching orders and we will have to wait to see what they do with them.

Related Content

This is What You Need to Know About President Trump’s...
October 23, 2017
Last week President Trump signed an executive order1 urging federal agencies to write, or re-write, regulations in three key areas of the Affordable Care Act (ACA). Here, we will discuss the changes and explain what impact they will have on the...
IRS Announces 2017 Inflation Adjustments
October 26, 2016

The IRS has announced inflation adjustments for 2017, confirming contribution limits for Flexible Spending Accounts (FSA), and transportation and parking fringe benefits.

  • The contribution limit for medical FSAs will increase in 2017 to $2600 (up...

Don’t Fall For The Pre-Tax Wellness Program Scam
October 21, 2016

A small number of operators in the benefits industry have been selling so-called “tax-free” wellness programs to employers. IRS has taken notice, but not in a good way.

The pitch goes something like this: An employer offers employees certain benefits...

“Pre-tax,” “Post-tax,” “Non-Taxable”—What does all of...
December 14, 2016

FSAs, HRAs, HSAs and CRAs are creatures of the federal tax code, which is notoriously complicated. To try to make things easier, we in the benefits industry sometimes use shorthand and other jargon, but sometimes these only complicate things further...