The U.S. Department of Homeland Security (Department) recently issued a notice proposing to terminate the international entrepreneur parole program (IE Program) in accordance with Executive Order 13767, entitled Border Security and Immigration Enforcement Improvements, because the IE Program represents an overly broad interpretation of the Department’s parole authority, lacks sufficient protections for U.S. workers and investors, and is not the appropriate vehicle for attracting and retaining talented international entrepreneurs. Continue Reading Proposed Termination of International Entrepreneur Parole Program

Late Thursday evening after President Trump issued an Executive Order earlier in the day directing various administrative agencies to take suggested actions for the hope of reducing the cost of health insurance, discussed here, the Trump Administration announced it would terminate cost-sharing reduction (“CSR”) payments based upon guidance to the Administration by the Department of Justice indicating that there is no federal appropriation for the CSR payments. The CSR payments are made by the Secretary of Health and Human Services to insurance companies to help offset the cost of providing reduced cost insurance to low income individuals who qualify for them on the Exchange. Insurance carriers providing products on the Exchange have already indicated significant premium hikes for their products if CSR payments are not made in 2018. Many industry experts fear this action would dramatically increase premium costs for those Exchange participants who can afford to remain on the Exchange if this change were to take effect, while leaving other individuals and families who cannot afford the premium increases no options for affordable coverage, discussed here. Although the Administration stated the payments would stop immediately, there really was no guidance as to when they would cease. Any cessation if implemented should not impact 2017 premium amounts as they have already been established but would be anticipated to apply to any 2018 premium amounts even though open enrollment has already begun. Already there are reports of anticipated litigation to oppose the action brought by insurers who are the recipients of the reimbursements as well as nineteen states who oppose the action. Congress has been considering legislation that would fund the CSR payments and the President’s action on Thursday evening may well prompt a quick response.

I received a few questions after last Thursday’s Executive Order asking if the Trump Administration’s actions did indeed nullify the ACA. The Administration is clearly trying to obfuscate the ACA after Congress failed to repeal it. However, employers and others charged with ACA compliance must keep in mind that the ACA remains a federal law that can only be repealed by Congress. As Chief Justice Roberts aptly noted in the Court’s majority opinion in King v. Burwell, “[w]e must respect the role of the legislature, and take care not to undo what it has done.” Those same constitutional constraints apply to the executive branch of government. The Trump Administration’s efforts last Thursday serve to deflate but not undo, or nullify, the ACA. However, this action, as compared to this Administration’s Executive Orders issued to Administrative Agencies regarding the ACA this year, has greater potential to put a chink on the ACA’s armor.

President Trump issued an Executive Order yesterday which purports to suggest three avenues for offering health insurance at a decreased cost to small employers and consumers for the overall goal of reducing healthcare costs on the grounds that the Affordable Care Act (ACA) has limited consumer choice resulting in an increase in healthcare insurance cost. The Order charges various administrative agencies to act within 60 days.

First, the Executive Order directs the Department of Labor (DOL) to issue proposed rules that would permit small employers to join together and create what can be likened to multi-employer plans for the purpose of obtaining the same discounts for insurance offered to large employers, interestingly one of the two premises behind creation of the ACA Exchanges, by expanding access to Association Health Plans. The proposed plan of action would rely on a “broader interpretation” of a provision of the Employee Retirement Income Security Act (ERISA) that permits multi-employer plans for employers who have a “commonality of interest.” ERISA is statutory law modifiable only by Congress although the Employee Benefits Security Administration (EBSA), a division of the DOL, is charged with enforcing ERISA as they pertain to employer’s healthcare plans.

The Executive Order directs the DOL, Department of Treasury and Department of Health and Human Services (HHS) to issue rules that permit healthcare coverage to be offered through short-term limited duration insurance which is not subject to the ACA by extending the allowable coverage under these types of plans for longer periods and permitting consumers to renew them. The Executive Order also directed the agencies to issue regulations applicable to Health Reimbursement Accounts (HRA) that increased the usability beyond what HRAs already offer.

One concern is the less costly healthcare insurance offered under AHPs or short-term limited duration insurance plans may not contain all of the coverage protections required by the ACA. As a reminder, the ACA requires that all healthcare plans offer coverage for essential health benefits and that the insurance plan provides minimum value (namely covering the cost of covered treatments up to a certain percentage of the total cost). Another concern regarding the proposals are that the changes would result in violations of other federal laws which prohibit disparity in premiums between younger, healthier workers or individuals as compared to premiums charged to those who are older or sicker.

The Executive Order identifies a number of statistics about healthcare insurance costs and coverage all to show that health insurance is becoming less affordable for consumers and too costly for carriers to offer resulting in a decrease of competitive healthcare insurance plans and an increase of uninsured.

President Trump also criticizes the consolidation of providers as a reason healthcare costs have increased, suggesting that the consolidations interfere with healthy competition, and requiring the Federal Trade Commission, along with DOL, HHS and Treasury, to report to him within 180 days on federal and state policies limiting competition and choice in the healthcare industry.

Similar to his January 31, 2017 Executive Order in which he asked enforcement agencies to soften penalties under the ACA where the law allowed, any agency attempting to comply with the admonishment cannot simply and quickly issue new rules that then become enforceable regulations. Finally, as a practical matter, because it is October, most calendar plan years are already engaged in the open enrollment process so the earliest any enforcement changes could be implemented for those plans would be 2019. The Executive Order can be found here.

In the meantime, employers should continue to abide by the ACA. The IRS anticipates issuing its first penalty letters to employers for noncompliance this December.

On March 15, 2017, the United States District Court for the District of Hawaii issued an Order granting a nationwide Temporary Restraining Order (“TRO”) against President Trump’s Executive Order No. 13,780 which was to be effective March 16, 2017 (the “Executive Order”). This Executive Order replaces the January 27, 2017 Executive Order. Both Executive Orders restrict the entry of foreign nationals from certain countries and refugees on a temporary basis.

The State of Hawaii and Ismail Elshikh, Ph.D. sought a nationwide TRO prohibiting the enforcement of Sections 2 (six country ban) and 6 (suspension of the U.S. Refugee Assistance Program) of the Executive Order. The Court found that the Plaintiffs met their burden by demonstrating a strong likelihood of success on the merits and granted the TRO. Specifically, the Court addressed (i) the Plaintiffs’ Establishment Clause claim, (ii) whether irreparable injury is likely to occur, and (iii) whether the balance of equities favors the Plaintiffs.

The Court addressed the three issues above in turn. First, on the issue of the Establishment Clause, the Court found that the six-country ban showed religious discrimination in violation of the Establishment Clause of the First Amendment. The government sought to demonstrate a lack of religious discrimination by stating that the six countries comprise of only 9% of the world’s Muslim population. However, the Court was not convinced – “The notion that one can demonstrate animus toward any group of people only by targeting all of them at once is fundamentally flawed.” State of Hawaii and Ismail Elshikh v. Donald J. Trump, CV. No. 17-00050 DKW-KSC (D. Hawaii March 15, 2017). Second, since the Plaintiffs demonstrated a likelihood of success on the Establishment Clause claim, the Court found that irreparable harm may be presumed. Lastly, the Court considered the balance of equities and the public interest. In analyzing this last issue, the Court weighed the national security concerns against the constitutional injuries and found that the “balance of equities and public interests justify granting the [] TRO.” Id.

As of now, individuals from the six countries listed in the Executive Order are subject to the same immigration rules as individuals from any other nation. The U.S. Refugee Assistance Program will remain unaffected. However, other unchallenged portions of the Executive Order such as the suspension of the Visa Interview Waiver Program will take effect as scheduled.

On March 6, 2017, President Trump signed a new immigration-related Executive Order. This anticipated Executive Order comes on the heels of his controversial January 27, 2017 Executive Order which temporarily suspended the refugee program and temporarily banned individuals from seven countries from entering the United States. The earlier Executive Order was halted in part by a Ninth Circuit Court Order, and met with widespread protests nationwide. The March 6th Executive Order repeals the January 27th Order in its entirety, and will take effect starting March 16, 2017.

The March 6th, Executive Order opened with an approximately two-page clarification of the earlier Executive Order. In response to popular outcry against the January Order and judicial disapproval of alleged religious discrimination, this Executive Order addressed the idea of a “Muslim Ban,” explaining that the earlier Order “did not provide for a basis for discrimination for or against members of any particular religion.” It further set forth the Administration’s policy objectives surrounding national security and cited a 2016 Department of State report justifying a temporary ban for individuals from Iran, Libya, Somalia, Sudan, Syria and Yemen on the basis of national security.

With this backdrop, the March 6th Executive Order’s key points are as follows:

  1. 90-day ban on individuals from six countries – Iran, Libya, Somalia, Sudan, Syria and Yemen. Iraq was left off the list this time. The Administration reasoned that a ban on Iraqis is unnecessary given the “close cooperative relationship between the United States and the . . . Iraqi government . . . .” While Iraq is not subject to the 90-day ban, Section 4 of the Order calls for a “rigorous evaluation” of applications by Iraqi nationals. The remaining countries present an “unacceptably high” threat.
  2. The Executive Order only applies to foreign nationals of the designated countries who:
    (a) are outside the United States on March 16, 2017;
    (b) did not have a valid visa at 5:00 P.M., eastern standard time on January 27, 2017; and
    (c) do not have a valid visa on March 16, 2017.
  3. There are several notable carve-outs narrowing the Executive Order’s scope. The Executive Order does not apply to: Green Card holders, dual nationals when traveling on a passport issued by a non-designated country, foreign nationals who have been granted asylum and certain others who hold select visas.
  4. Immigration officials are permitted to make case-by-case determinations to issue visas or permit the entry of foreign nationals for whom entry is otherwise suspended. The foreign national must demonstrate “undue hardship” and that the foreign national’s presence would not pose a threat to national security. The Order outlines instances in which such a waiver may be appropriate, including when the foreign national:
    (a) has been previously admitted for work, study or other long-term activity, and seeks to re-enter the United States to resume this activity;
    (b) seeks to enter for significant business or professional obligations;
    (c) seeks to visit a close family member who is lawfully in the United States; or
    (d) seeks urgent medical care or has a special circumstance.
  5. The United States Refugee Assistance Program (USRAP) is temporarily suspended for 120 days, and the 2017 refugee numerical cap is set at 50,000 refugees. However, the suspension does not apply to those who have been formally scheduled for transit by the Department of State.
  6. The Visa Interview Waiver Program is suspended, meaning that in most instances, a non-immigrant visa applicant will have to undergo an in-person interview.
  7. Several other provisions from the January Executive Order remain in place including the visa reciprocity review and the data collection directives in Section 10 and 11 of the new Order, respectively.

The Executive Order is clear that any immigrant or non-immigrant visa issued before March 16, 2017 shall not be revoked pursuant to the new Order. While this Executive Order is far more specific than the January Order, the implementation by the various agencies will be worth watching to understand its practical impact. Travelers are well-advised to ensure that all immigration-related documentation is in order, account for delays when traveling to and from one of the six listed countries, and maintain a contingency plan in case of unforeseen events in transit.

Haynsworth Sinkler Boyd will continue to monitor further developments in this dynamic immigration climate.