Big News: Biden Signs Executive Order Opening Door to End Damaging Trump-Era ICHRA, STLDI Policies
Keep US Covered posted on February 11, 2021
On January 28, 2021, President Joe Biden took a huge first step to protect Americans’ access to quality health coverage by signing Executive Order (EO) 14009, which is focused on two top priorities of Keep US Covered. In one of his first acts in office, the president directed relevant federal agencies to review several deeply flawed Trump Administration health care policies that threaten quality coverage, the Affordable Care Act, and the reliability of job-based health insurance. Specifically, President Biden initiated a process that could reverse federal ICHRA rules that promote a potentially discriminatory system of health benefits as well as a regulation that allows short-term, hollow insurance products to be sold as long-term solutions. Ending these rules are two top priorities of Keep US Covered, and we applaud this development and what it could mean for improving working Americans’ health coverage.
President Biden’s action is focused on an executive order former President Trump signed – EO 13813 – in 2017. Biden wants his administration to look at the policies that flowed from that Trump EO and consider “suspending, revising, or rescinding” them. Here are the details:
Sec. 4. Revocation of Certain Presidential Actions and Review of Associated Agency Actions. (a) Executive Order 13765 of January 20, 2017 (Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal), and Executive Order 13813 of October 12, 2017 (Promoting Healthcare Choice and Competition Across the United States), are revoked.
(b) As part of the review required under section 3 of this order, heads of agencies shall identify existing agency actions related to or arising from Executive Orders 13765 and 13813. Heads of agencies shall, as soon as practicable, consider whether to suspend, revise, or rescind –- and, as applicable, publish for notice and comment proposed rules suspending, revising, or rescinding — any such agency actions, as appropriate and consistent with applicable law and the policy set forth in section 1 of this order.
This Trump EO was the impetus for two damaging health care rules – one that created Individual Coverage Health Reimbursement Arrangements (ICHRAs) and one that loosened restrictions on Short-Term, Limited Duration Insurance (STLDI). Both have the effect of promoting weaker health coverage for working Americans. To recap:
One policy that developed out of Trump EO 13813 was a new so-called ICHRA system, in which rather than being provided quality coverage directly from their employer, some employees are forced to find coverage on their own and then file for a reimbursement from their employer. The system means workers are on their own to find coverage on the individual market, which is generally less robust than what an employer plan offers. The regulation also opens the door to discrimination, by allowing employers to offer different health benefits for different “classes” of employees (i.e., factory workers receive worse coverage than their colleagues who work at headquarters). And by pushing more individuals, often the ones that are most expensive for employers to cover, onto the ACA marketplaces, it has the potential to raise the costs for every American who gets their coverage through the exchanges.
The other Trump regulation now under review has to do with short-term, limited duration insurance. These products exist to fill brief gaps in coverage, such as when an individual is between jobs but are typically not comprehensive coverage. But the Trump administration redefined “short-term” to mean as long as three years. This has flooded the market with products that consumers do not realize fail to provide full coverage. Often, this kind of insurance doesn’t cover prescription drugs, maternity and mental health. People are often attracted to short-term insurance because of lower premiums, but you get what you pay for. They leave people unsuspectingly exposed, lacking real protection, and often on the hook for huge medical bills.
Reversing these rules and strengthening quality coverage for all Americans are core to the mission of Keep US Covered. President Biden’s action puts the federal government squarely on the path to fixing these rules that put Americans at risk. Keep US Covered will continue to urge the administration to follow through and fully end these harmful regulations.