Trump’s health care initiatives are great for small business — except for one huge problem
When it comes to health insurance, President Trump is certainly trying to do his best by way of small businesses.
Ask any small business owner and they’ll tell you that providing affordable and competitive health insurance is an enormous challenge in these days of continued cost escalation and competition from larger companies. Health care – now expected by most employees and demanded by the dwindling number of qualified job applications in this low-unemployment economy – ranks among a small business owner’s top expenses.
It’s the reason why 57 percent of businesses said the cost of health care crowds out other priorities, according to the recent Small Business Growth Index from the U.S. Chamber of Commerce. It’s also the reason why two-thirds of consumers say reducing health care costs should be a top priority of the president, according to a Pew Research Center study conducted earlier this year.
President Trump seems to get this. Through executive orders and departmental edicts – and despite valid concerns from his opponents, economists, federal budget-watchers and people in the health care industry – the president has over the past few years given more choices to small business owners when it comes to offering health insurance for their employees.
For example, Trump relaxed the rules for making less expensive, short-term health care plans that don’t meet the requirements of the Affordable Care Act available. He re-launched association health plans that enable small employers to band together and negotiate lower health care rates. He has proposed expanding Healthcare Savings Accounts (HAS) to enable employees to put away more pre-tax dollars for out-off-pocket costs and deductibles. He has also issued new rules requiring hospitals and pharmaceuticals to disclose more information about their pricing so that those same HSA savers can better evaluate where to spend the money they’ve put away.
But that’s not all.
In June, the president issued a rule that expanded the usefulness of Healthcare Reimbursement Accounts. Rendered almost useless as a result of 2010’s Affordable Care Act, HRA’s are now a potential big tool to help small business owners provide health care benefits for their employees. Under the president’s directive, money put away pre-tax into an HRA can be used to pay for health care premiums wherever (for the most part) an employee decides to purchase.
So this way even if a small business doesn’t offer its own healthcare plan, at least it can contribute something via an employee’s HRA and keep itself in the game when competing with other employers.
All of this is good stuff for business owners. We have more options. We can choose benefits that better match what we can afford. But there’s one big problem and it’s holding us back: none of this is law.
The Affordable Care Act is law. We know this because there have been multiple Supreme Court cases that challenged and failed to overturn it. There was a failed vote in the Republican-controlled Congress to repeal it. There’s mostly resignation that, as a law, it will be very difficult to replace it. It’s written in the books.
Unfortunately, President Trump’s “rules” aren’t laws, which means that his successor can easily repudiate them. So small business owners who’ve spent a significant amount of their very limited time and resources implementing an Association Health Plan or Healthcare Reimbursement Plan, and who have gone to the effort of changing their health benefits and training their employees, are potentially out of luck. They may have to start all over once this president is no longer around.
That’s the reason why so many business owners I know are holding back on these initiatives. They realize that they’re built on a very uncertain platform. They don’t want to upend their company’s health plans and their employees’ health coverage on a set of rules that can be changed almost overnight. Already there are multiple lawsuits challenging the legality of these rules and whether or not they’re even constitutional.
When it comes to health care, Trump has done his best to help small businesses. But he’s failed to achieve legislation. He is purportedly working on a Republican health care plan that he plans to introduce in the late summer/early fall. Unfortunately, given the significant challenges he already faces in winning re-election, and unless he convinces Congress to turn what he’s done into actual legislation, his efforts may be for naught.
Gene Marks is founder of The Marks Group, a small-business consulting firm. He frequently appears on CNBC, Fox Business and MSNBC.