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.
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.
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 The additional Medicare tax on high earners would be repealed in 2018.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 Changes made by the ACA affecting health FSAs and HSAs would be revised or repealed.
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
|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|
|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|
|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|
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.