What’s Different? A Guide to the Proposed Health Care Reform Changes

As a follow up to our March 7 blog post, the ThinkHR benefits team prepared this guide of the key components impacting employers with the proposed legislation announced earlier this week to repeal and replace the Affordable Care Act (ACA). The proposal is comprised of two separate bills since two different committees, the Ways and Means Committee and the Energy and Commerce Committee, have jurisdiction over different aspects. Collectively called the American Health Care Act (AHCA), the bills will go through mark up, amendments, and House votes before moving on to the Senate for next steps and ultimately to President Trump for signature.

The committees did not release any cost estimates, and the Congressional Budget Office (CBO) has not yet had an opportunity to score the bills. That, coupled with the political criticism from both parties after the AHCA was announced, makes it unclear as to whether the proposal will move forward as currently drafted. The primary focus is on funding for Medicaid and other state programs and maintaining stability in the individual insurance markets, although a number of provisions offering relief to employers and reducing the scope of health plan requirements also are included.

Employer Highlights

Employer Mandate

The proposed legislation would repeal the ACA’s employer shared responsibility provision, the so-called “employer mandate” or “play or pay,” as of 2016. The rules for 2015 would not change, which would still be an issue for certain large employers that did not qualify for transition relief that year.

Employer Reporting

The committees acknowledge that procedural rules in Congress prevent them from repealing the ACA’s reporting requirements. The existing rules requiring completion of Forms 1094 and 1095 continue to apply.

Taxes and Fees

The Cadillac tax on high-cost health plans would be delayed five years, then take effect in 2025. The PCORI fee would continue as previously scheduled for plan years through September 2019. The additional Medicare tax on high earners would be repealed in 2018.

Health Plan Requirements

Current ACA rules regarding eligibility for children to age 26, coverage for pre-existing conditions, prohibitions against annual or lifetime dollar limits, and most other provisions would continue unchanged. Changes made by the ACA affecting health FSAs and HSAs would be revised or repealed.

Employer Guide

For a convenient summary of the key ACA provisions for employers and group health plans, and how each item would be affected by the proposed legislation, we’ve prepared the following guide.

 

Current ACA Provision

Proposed Change

Employer Requirements
Employer Mandate (Play or Pay) Repeal as of 2016
Employer Marketplace (Exchange) Notice No change
Employer reporting requirements (1094-C and 1095-C) No change
W-2 reporting of health coverage cost No change
Fees/Taxes
Comparative Effectiveness Research Fee (PCORI Fee) No change
Excise tax on high-cost coverage (Cadillac Tax) Delay until 2025
Additional Medicare tax on high earners Repeal as of 2018
Health Plan Requirements
Eligibility for children up to age 26 No change
Coverage of routine care for clinical trial participants No change
Coverage of certain preventive services at 100% No change
Exclude non-prescribed OTC meds from tax-free coverage Repeal as of 2018
General definition of Essential Health Benefits (EHBs) No change
Limit on annual health FSA contributions Repeal as of 2018
Limits on out-of-pocket maximums for EHBs No change
No annual or lifetime dollar limits for EHBs No change
No pre-existing condition exclusions No change
Parity between in-network and out-of-network emergency care No change
Patient protections (PCP selection; OB/GYN care without precert) No change
Prohibition against coverage rescissions No change
Summary of Benefits (SBC) requirements No change
90-day limit on waiting periods No change
Miscellaneous
Annual limits on health savings account (HSA) contributions Increase as of 2018
Increase penalty on non-qualified HSA distributions from 10% to 20% Repeal as of 2018
Simple cafeteria plans (small/midsize employers) No change
Small business tax credit Repeal as of 2020
Small Group Market Plan Requirements
Adjusted community rating Revised
Coverage of all 10 Essential Health Benefits (EHBs) No change
Guaranteed issue and renewability No change

 

More Information

To view the proposed bills, along with a section-by-section summary prepared by each committee, see:

Ways and Means Committee (primarily focused on tax provisions, including mandates):

Energy and Commerce Committee (primarily focused on Medicaid and other funding to states):

ThinkHR will continue to monitor and report on new developments with the AHCA that will impact employers.

About Laura Kerekes, SPHR, SHRM-SCP

Laura Kerekes is ThinkHR’s Chief Knowledge Officer and leads the company’s human resources knowledge operations teams. She provides expertise to customers with complicated human resources and management issues, offers knowledge and guidance regarding management and HR best practices, and regularly shares her expertise through articles and webinars.