President Donald Trump on Thursday signed an executiveorder that officially puts his administration's weight behind theidea of letting small employers join together to forminterstate health coverage purchasing groups.

Another provision could eliminate the current 90-day cap on theduration of short-term medical insurance coverage from asingle issuer.

A third could lead to changes in the rules governingemployer-sponsored health reimbursement arrangements.

Trump signed the order during a brief ceremony in the OvalOffice.

Health policy watchers have been discussing what were said to beleaked copies of order drafts, and speculatingabout what might be in the final version, for weeks. Trumphimself tweeted that he expected the order to include anassociation health plan provision.

The White House posted a copy of the order and a summary of theorder.

The White House streamed the signing ceremony for theorder live on the web. A recording of the video isavailable here.

Trump said at the ceremony that the order will direct the headsof the U.S. Treasury Department, the U.S. Department of Labor andthe U.S. Department of Health and Human Services to take steps toincrease competition and choices in the health care market, and topromote the creation of new low-cost, high-quality health careoptions for consumers and employers.

"They will have so many options," Trump said. "This will costthe U.S. government virtually nothing."

Sen. Rand Paul, R-Ky., a senator who has argued in the past thatsome of the major Affordable Care Act change bills debated in theSenate were too weak for him to support, appeared at the signingceremony to support the order.

Paul called the association health plan provision in the order"the biggest free-market reform in a generation."

"This reform, if it works and goes as planned, will let millionsof people get insurance across state lines at an inexpensiveprice," Paul said.

Trump cited Paul's presence at the ceremony as evidence that theexecutive order will make the situation better. "When you get RandPaul on your side, it has to be positive," Trump said.

Here's a look at three facts about the order of possibleinterest to agents and brokers.

Continued on next page>>>

1. The order mostly spells out general goals for federalagencies.

In the order, Trump states that his administration will focus onimproving regulations in three areas: fostering the creation ofinterstate association health plans; easing the rules that apply toshort-term medical insurance plans; and expanding access to healthreimbursement arrangements.

Trump says in the order, for example, that he wants smallemployers to be able to use interstate association health plans, orhealth insurance purchasing groups, to be able to enjoy the samebenefits that large employers now enjoy when those large employersself-insure.

Trump does not say in the order exactly what he thinks theassociation health plans would look like, or how he expects therules governing short-term medical insurance or healthreimbursement arrangements to change.

2. Trump does give some hints about what he and others in hisadministration dislike about the current regulations and how theregulations might change.

In the order, Trump does offer some specific advice for hiscabinet secretaries.

Interstate Association Health Plans

Trump encourages Secretary of Labor Alexander Acosta to look forways to support access to interstate association health plansby:

• Loosening the rules for deciding what kind of an organizationqualifies as an "employer" under Section 3(5) of the EmployeeRetirement Income Security Act of 1974 (ERISA).

• Letting employers join together in health benefits purchasinggroups if they're in the same industry, or if they're in the samearea of the country.

Short-Term Medical Insurance

In a section on short-term medical insurance, Trump talks mainlyabout short-term medical insurance policy duration rules.

Until recently, state insurance regulators decided how long ashort-term medical insurance policy could last. In some states, apolicy could last almost a year.

Drafters of the Affordable Care Act excluded short-term medicalinsurance from the quality and underwriting standards that apply tomajor medical coverage.

An issuer of short-term medical insurance can, for example,refuse to sell coverage to people with cancer, and it can capbenefits at $50,000 per year, or leave out benefits for ordinaryphysician office visits.

A major medical coverage issuer must sell coverage withoutregard to the applicant's health, provide unlimited annual andlifetime benefits, and provide coverage for a standard "essentialhealth benefits" package.

Under the Obama administration, the U.S. Department of Healthand Human Services (HHS), U.S. Department of Labor and U.S.Treasury Department joined together to cap the duration ofshort-term medical insurance from any one issuer at three months,to reduce the chances that consumers would try to use short-termmedical insurance as an alternative to major medical coverage.

Discouraging use of short-term medical insurance as a majormedical insurance alternative could protect consumers againstunpleasant coverage gap surprises, and it could protect majormedical coverage issuers against losing younger, healthierprospects to the short-term medical insurance issuers, Obamaadministration officials said when they completed work on theregulations.

Up till now, officials in the Trump administration had nottalked much about the three-month cap on short-term medicalinsurance policy durations.

In the new executive order, Trump talks directly about theduration issue.

Trump encourages Acosta, Treasury Secretary Steven Mnuchin, andEric Hargan, the new acting HHS secretary, to look at short-termmedical insurance, and "consider allowing such insurance to coverlonger periods and be renewed by the consumer."

Health Reimbursement Arrangements

A health reimbursement arrangement (HRA) is a program that letsan employer make cash available for an employee's health careexpenses.

The employer, rather than the employee, owns the value stored inan HRA. In some ways, that makes HRAs less attractive to employeesthan health savings accounts, which are owned by the employee,because employers can decide whether departing employees cancontinue to keep and use any HRA value still available.

For many employees, however, an HRA may be more attractive thanan HSA, because an employee can use an HRA with low-deductiblehealth coverage, rather than the high-deductible coverage that mustbe used in conjunction with an HSA.

In the past, officials in the Obama administration and otheradministrations have tried to limit employers' ability to letworkers use HRA value to pay for individual health coverage. Somehealth policymakers fear that letting workers use HRA money to payindividual coverage premiums could accelerate small employers'shift away from offering traditional, employer-paid group healthbenefits.

Trump says in his order that he wants his Treasury, Labor andHHS secretaries to come up with regulations, guidance or guidanceupdates to make HRAs more usable, to expand employers' ability tooffer HRAs to their employees, and "to allow HRAs to be used inconjunction with nongroup coverage."

Continued on next page >>>

3. Mechanics

The executive order may not have any concrete effect on federalregulations, guidance or procedures, and any changes that domaterialize could take many months, or years, to arrive.

Trump notes in the order that his secretaries must operatewithin the limits of applicable federal law, and within thebudgetary and administrative requirements of the federal Office ofManagement and Budget.

• The Labor secretary has 60 days to develop his associationhealth plan proposals.

• The Treasury, Labor and HHS secretaries have 60 days to developtheir short-term medical insurance proposals.

• The Treasury, Labor and HHS secretaries have 120 days to developtheir health reimbursement arrangement proposals.

Cabinet secretaries also must put any regulations they developas a result of the executive order through a public comment period,Trump says.

The politics of the public comment process could be tricky, bothfor the Trump administration and for the health insurance andbenefits community.

In the past, for example, insurers and state insuranceregulators have battled employer groups over association healthplan proposals.

Short-term medical insurance proposals have led to fightsbetween short-term medical issuers and major medical issuers.

HRA proposals often pit employers, employer groups and benefitplan administrators against insurers and insurance regulators.

Critics of the reform ideas in the executive order typically saythey will weaken protections for patients and increase coveragecosts, or hurt coverage access, for higher-risk individuals oremployers.