On March 23, 2010 President Obama signed into law H.R. 3590, the Patient Protection and Affordable Care Act (PPACA). One week later, on March 30, 2010, the President signed into law H.R. 4872, the Health Care and Education Reconciliation Act of 2010, making numerous changes to the PPACA. Together, these two laws completed Congress's efforts to enact comprehensive health care reform in the United States.
Much like the health care system it tried to reform, the PPACA is large and complex. For employer health plan sponsors in particular, the PPACA is having the most significant impact on their role since the enactment of ERISA over 30 years ago. Employers need to understand the requirements and opportunities presented by the new law in order to address immediate priorities while formulating long-term strategies.
On May 4, 2017, members of the U.S. House of Representatives voted 217-213 to pass the American Health Care Act (AHCA), after it had been amended several times. The AHCA is the proposed legislation to repeal and replace the Affordable Care Act (ACA).
IMPACT ON EMPLOYERS
The AHCA will now move on to be considered by the Senate. It is likely that the Senate will make changes to the proposed legislation before taking a vote. The AHCA would only need a simple majority vote in the Senate to pass.
However, unless the AHCA is passed by the Senate and signed by President Trump, the ACA will remain intact.
Notable Provisions of the American Health Care Act
If signed into law, the American Health Care Act would, among other changes, make the following revisions to key features of the ACA over the next three years:
"Pay or Play": Penalties for noncompliance with the "pay or play" coverage requirement (which mandates, in general, that employers with 50 or more full-time employees [including full-time equivalent employees] must offer affordable, minimum value coverage to their full-time employees, or pay a penalty tax) are zeroed out. However, the Form 1094 & 1095 reporting requirements are unchanged by the bill.
Individual Mandate: Penalties for noncompliance with the individual mandate are zeroed out, effectively repealing the mandate. In its place, the bill requires issuers in the individual or small group markets to impose a 30% penalty on the health insurance premiums of individuals who do not maintain continuous health insurance coverage.
HSA Contribution Limits: Limits on contributions to health savings accounts (HSAs) are increased to equal the inflation-adjusted annual out-of-pocket expenses limitation imposed on high deductible health plans (currently $6,550 (self-only coverage)/$13,100 (family coverage)).
Health FSA Contribution Limits: Limits on contributions to health flexible spending arrangements (health FSAs) are eliminated.
Tax Credits for Individual Coverage: Replaces the ACA's premium tax credits for individual market coverage with advanceable, refundable tax credits adjusted for both age and income.
Market Reforms: Permits states to seek waivers from the ACA's essential health benefits and age and health status community rating requirements.
Medicaid: Allows states to elect to receive federal Medicaid funding via a block grant or per capita allotment, and alters the ACA’s Medicaid expansion.
To read the American Health Care Act in its entirety, click here.
Group Benefit Solutions is uniquely qualified to advise businesses in this area. We have studied the current and proposed new laws extensively and make recommendations to lessen the impact on your business.
What you should know…
• Benefits of Health Care Reform
• How does the PPACA affect COBRA?
• PPACA Top Employer Health Care Reform Questions
• Benefits 101: Health Care Reform Presentation
• What does Health Care Reform Mean for You?
• Health Care Reform - The Individual Mandate