	Introduction

On October 12, 2017, President Trump issued Executive Order (E.O.) 13813, entitled "Promoting Healthcare Choice and Competition Across the United States." E.O. The order addresses three unrelated, private-sector health coverage options: association health plans (AHPs); short-term, limited-duration insurance (STLDI); and health reimbursement arrangements (HRAs). This report answers frequently asked questions (FAQs) about E.O. 13813 and subsequent rulemaking and provides background information about AHPs, STLDI, and HRAs. 13813 directs specified agencies to "consider proposing regulations or revising guidance, consistent with the law" to expand access to AHPs, increase availability of STLDI, and expand the availability and permitted use of HRAs. Because federal statute does not define association health plan (or association coverage ), AHP is colloquially used to represent a wide spectrum of arrangements that provide health coverage through different types of organizations, including but not limited to trade associations, professional societies, and chambers of commerce. Instead, relevant federal agencies have indicated that a given AHP should be regulated according to the characteristics of the organization offering the AHP coverage and plan enrollees. Overall, the vast majority of AHPs provide either individual or small-group coverage, as determined by federal regulatory agencies (see the following discussion about regulatory activities at the Department of Labor [DOL] and the Department of Health and Human Services [HHS]). Also, association coverage that is not provided in connection with a group health plan is not group coverage for PHSA purposes; such coverage would be subject to individual insurance requirements. On January 5, 2018, DOL issued a proposed regulation concerning AHPs. Collectively, the changes proposed in the rule would allow AHPs currently regulated as small-group or individual coverage at the federal level to be regulated as large-group coverage instead, as long as the group meets the size definition of a large group. The reduced regulatory burden could affect the regulation of current AHPs and encourage the formation of new AHPs. AHP proponents argue that the proposal will not only lead to an expansion of coverage options but also lower premiums for those options. 13813. STLDI is a type of health insurance that is generally designed to fill gaps in having health insurance coverage, particularly for individuals transitioning from one type of coverage to another. In layman's terms, this means that an STLDI policy can last a maximum of three months, including any extensions a consumer may request. See " What Is Short-Term, Limited-Duration Insurance? " ": health insurance coverage provided "pursuant to a contract with an issuer that (1) has an expiration date specified in the contract (taking into account any extensions that may be elected by the policyholder with or without the issuer's consent) that is less than 3 months after the original effective date of the contract" (emphasis added) and (2) includes information in its contract and application materials about the coverage not being considered minimum essential coverage for purposes of the individual mandate penalty (see Table 2 ). What Changes to STLDI Have Been Proposed in Response to E.O. Opponents of the currently proposed changes have emphasized the potential negative impacts on the risk pool for the individual market for comprehensive coverage (including individual exchanges), in terms of shifts in enrollment away from this market, premium increases for those who remain in this market, and increases in federal outlays for premium tax credits. Health Reimbursement Arrangements (HRAs)

		What Are Health Reimbursement Arrangements? HRAs are employer-established arrangements that pay or reimburse employees for substantiated medical care expenses up to a maximum dollar amount. HRAs are funded solely by employers; employees cannot contribute to HRAs directly or through salary-reduction agreements. Payments and reimbursements from an HRA for an employee's (and the employee's spouse and dependents) substantiated medical care expenses are excluded from the employee's income and employment taxes. In general, employers may offer to employees only HRAs that are integrated with another group health plan (that is not an HRA). However, HRAs are not explicitly authorized by legislation and are not named in the IRC. As of the date of this report, the Secretaries of the Treasury, Labor, and HHS have not proposed changes to HRAs.
On October 12, 2017, President Trump issued Executive Order (E.O.) 13813, entitled "Promoting Healthcare Choice and Competition Across the United States." E.O. 13813 directs specified agencies to consider regulatory or sub-regulatory approaches to expand access to three unrelated, private-sector health coverage options: association health plans (AHPs); short-term, limited-duration insurance (STLDI); and health reimbursement arrangements (HRAs). This report answers frequently asked questions (FAQs) about E.O. 13813 and subsequent rulemaking and provides background information about AHPs, STLDI, and HRAs.
Association health plan is an umbrella term that represents a spectrum of arrangements that provide health coverage to a collective body of employers or individuals (e.g., self-employed persons). AHP coverage may be provided through different types of organizations, including but not limited to trade associations, professional societies, and chambers of commerce. Given the absence of a federal definition for either association health plan or association coverage, applicable federal agencies have indicated that a given AHP should be regulated according to the characteristics of the organization offering the AHP coverage and plan enrollees. Generally, association coverage is addressed through sub-regulatory guidance. The vast majority of AHPs provide either individual or small-group coverage, as determined by federal regulatory agencies. On January 5, 2018, the Department of Labor issued a proposed regulation that would amend the federal definition of employer. The proposed amendment potentially could allow certain AHPs that currently are regulated as individual or small-group coverage to be regulated as large-group coverage instead, and it could encourage the formation of new AHPs. Such a change would reduce the overall scope of federal requirements applicable to those AHPs. AHP proponents argue that the proposed changes would expand coverage options and reduce premiums for certain consumers. AHP opponents argue that those changes would raise premiums for consumers with greater health care needs, particularly in the individual market.
Short-term, limited-duration insurance is a type of health insurance that generally is designed to fill gaps in health insurance coverage, particularly for individuals transitioning from one type of coverage to another. STLDI is defined in regulations as health insurance coverage with a maximum duration of three months (including any extensions a consumer may request) that is marketed and issued with disclaimer language about the coverage not being considered minimum essential coverage for purposes of avoiding the individual mandate penalty. Beyond this definition, STLDI is not subject to federal requirements applicable to health coverage. On February 21, 2018, the Departments of Health and Human Services (HHS), Labor, and the Treasury jointly issued proposed regulations that would increase the maximum duration of STLDI from 3 months to 12 months, make policy extensions easier, and modify the required disclaimer language. Proponents of expanding access to STLDI argue that these changes would provide more insurance options for consumers; opponents of the proposed changes have emphasized the potential negative impacts on the risk pool for the individual market for comprehensive coverage.
Health reimbursement arrangements are employer-established arrangements that pay or reimburse employees for substantiated medical care expenses up to a maximum dollar amount. HRAs are funded solely by employers; employees cannot contribute to HRAs. Payments and reimbursements from an HRA for an employee's substantiated medical care expenses (and those of the employee's spouse and dependents) are excluded from the employee's income and employment taxes. In general, employers may offer to employees only HRAs that are integrated with another group health plan (that is not an HRA). Although HRAs are governed under the federal tax code, they are not explicitly authorized by legislation. Generally, HRAs are addressed through sub-regulatory guidance. As of the publication date of this report, the agencies identified in E.O. 13813 (Treasury, Labor, and HHS) have not published guidance or proposed regulation on HRAs in response to the order.