All posts tagged congress

ACA Repeal Plan Is Dead; So What Should You Do?

A blank tombstone against a sky with fluffy clouds..

Now that the American Health Care Act has suffered a defeat in Congress and President Trump has said he’ll move on to other matters, the Affordable Care Act will stand as the law of the land.

The big question hanging over the law, however, is the executive order that Trump signed shortly after taking office in January. While that order did not abolish the legislation, it set the stage for agencies to act immediately on regulations that are deemed overly burdensome.

However, the administration has not indicated what it will do now that the AHCA has ground to a halt.

While the executive order still stands, it’s now abundantly clear that the ACA will not be repealed this year, but what’s not certain is how the agencies will enforce the law’s regulations.

They can choose, for example, not to enforce the penalties for applicable large employers who do not provide acceptable health insurance for their employees, or to enforce the penalties for individuals that do not secure health insurance if none is offered by their employer.

There are two main agencies that have enabling regulations in place for the ACA: the

Department of Treasury and the Department of Health and Human Services (HHS). There has been no indication or announcement from these agencies that they will or will not enforce the regulations currently in place or whether they are in the process of starting to write new ones.

Regardless, whatever they chose to do, rule-making takes time… often years. In fact, the regulations that enabled the ACA took four years to unfold as the agencies were busy writing them and putting them out for public comment.

And any rules would still have to be changed within the confines of the ACA, and it’s unclear how much leeway the agencies have in deviating from that law.

The executive order reads:

“…it is imperative for the executive branch to ensure that the law is being efficiently implemented, take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act, and prepare to afford the States more flexibility and control to create a more free and open healthcare market.”

It also said that the HHS secretary and other agency heads “shall exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision… that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”

Meanwhile, Trump has expressed willingness to work with the Democrats to get a new law pushed through, but the chances of that are slim if he insists on repealing the ACA. They are more likely to be open to changes to address some of the problems with the law, particularly the lack of participation by private insurers in health exchanges in some parts of the country.

 

The takeaway
So what does this mean for you, an employer? It means you should continue providing insurance for your employees if you are an applicable large employer, and continue submitting the required forms to the IRS.

For now, do what you’ve been doing.

 

Bill Would Make Collecting Health Information for Wellness Plans Easier

blue double helix models on background

Legislation has surfaced in Congress that would allow employers to collect biometric and genetic information from employees and their family members as a precondition for participation in a company wellness program.

The bill would essentially repeal a portion of the Genetic Information Non-discrimination Act (GINA), which in part bars employers from collecting genetic information on employees or members of their family for certain wellness programs.

The GINA bars health insurers and employers from discriminating against people based on information that their genes carry – say, a family history of heart disease or stroke.

The law contains an exception for employers that collect information from employees for a voluntary wellness program, the kind with no carrots or sticks for participation.

It is aimed at wellness programs that offer employees discounts on their health insurance in exchange for participation. Wellness plans may require participation in a health risk assessment or that the employee meet certain fitness or health goals.

Under the Affordable Care Act, employers can offer discounts of up to 30% on health insurance to employees that participate in wellness plans. In some cases, the employer can offer up to a 50% discount if the employees meet certain health targets.

HR 1313 would allow employers to collect biometric information from employees and their family members as a prerequisite for participation in wellness programs that provide discounts or other financial incentives.

Employer groups have decried the GINA’s strict rules, which they say inhibit their ability to help employees improve health metrics like high blood pressure and obesity, among others.

 

Bill’s key language

HR 1313’s key language states that:

The collection of information about the manifested disease or disorder of a family member shall not be considered an unlawful acquisition of genetic information with respect to another family member as part of a workplace wellness program.”

The bill passed along party lines in the House Education and the Workforce Committee, (22 Republicans for and 17 Democrats against). It still has other committees to clear before the full House votes on the legislation and sends it to the Senate.

Proponents of the bill, like the American Benefits Council, say that it would preserve wellness plans, which they say have suffered under the GINA.

GOP Releases Legislation to Gut and Replace ACA

House Republicans have filed legislation that would repeal most of the Affordable Care Act, including measures to eliminate the employer and individual mandates.

But from the get-go the legislation – backed by the House leadership – was panned by the GOP’s conservative wing, which said it doesn’t go far enough to completely get rid of the ACA, casting doubt on the prospects of it getting passed.

And Congressional Democrats immediately voiced their absolute opposition to the bill, vowing to vote ‘No’ on the legislation.

While passage in the House would be a bit easier, the slim 51-49 vote edge that Republicans hold in the Senate means it’s unclear whether the bill can pass in its present form.

But for now, this is the only piece of viable legislation that’s been floated to gut the ACA, and replace it with a scaled-down version.

The leadership is mindful that they cannot do an outright repeal, since it would affect some 20 million people who have been able to secure health insurance under the ACA.

The bill, called the American Health Care Act, would be phased in over time and would keep the ACA’s premium subsidies for policies purchased through insurance exchanges until 2020, as well as fund Medicaid expansion under the ACA for the same time.

This is just the first draft, and because of the opposition from conservatives in the Republican Party, the current version will not likely be the final one.

House Speaker Paul Ryan has said he wants to see the bill passed by Congress by the end of April. In other words, there will be a lot of work to do in very short order.

 

Here are some of the major provisions of the bill:

  • Eliminating the employer mandate that requires employers with 50 or more full-time or full-time equivalent workers to offer health insurance.
  • Eliminating the individual mandate requiring Americans to be covered either through their employment or by purchasing coverage on the open market or a health insurance exchange.
  • Ending the funding for Medicaid expansion as of 2020.
  • Converting the Medicaid to a program of capped per-capita federal grants to the states, starting in 2019.
  • Eliminating the subsidies available under the ACA and replacing them with age-based, refundable premium tax credits to help people buy insurance. Under the ACA subsidies are based on income, not age, and the proposed age-based tax credits generally would be smaller than the ACA’s.
    The tax credits proposed by House Republicans would start at $2,000 a year for a person under 30, rising to a maximum of $4,000 for a person 60 or older. A family could receive up to $14,000 in credits.
  • Removing ACA taxes and penalties (adding a premium incentive for continuous coverage and allowing insurers to tack on a 30% surcharge for people who let their policies lapse).
  • Protecting employer exclusion (tax write-off for employers and pre-tax for employees).
  • Retaining the “Cadillac tax” on high-value plans, but delaying its implementation to 2025 from 2020.
  • Eliminating the requirement that plans must offer minimum essential benefits.
  • Offering states $100 billion over nine years to establish high-risk pools or other mechanisms for stabilizing the individual insurance market.
  • Allowing insurers to charge older individuals five times higher premiums than they charge younger people. That’s compared with the 3 to 1 ratio under the ACA.
  • Expanding and promoting health savings accounts.

 

 

The fate of the legislation remains to be seen and under the proposal, it would surely not live up to President Trump’s promise that individual plans would be better and less expensive under the GOP’s ACA replacement.

 

We will keep you posted as the legislation develops.

 

 

 

Republicans Consider Axing Tax Exclusion on Employer-sponsored Plans

Money grinding in gears.

As work on trying to overhaul the Affordable Care Act continues, lawmakers are considering a bold and what would likely be a controversial move to eliminate the tax exclusion for employer-sponsored health benefits.

The amount of taxes that are not collected as a result of the exclusion amounts to about $216 billion a year according to the Tax Policy Center, and is therefore a significant pool of untapped funds.

The current exclusion has its roots dating back to World War II when the government ordered that wages be frozen and tax-free health insurance be available. The notion of now taxing the benefit would likely not go down well with anyone who currently receives employer-sponsored health insurance.

While economists have long hated the tax exclusion, workers and employers love it. Depending on how much you pay in taxes, the savings on the cost of expensive health benefits can be substantial. Most Americans under 65 benefit from tax savings associated with this policy.

The outline details how funds raised through the collection of these taxes would be spent on various aspects of the health insurance system like Medicaid, tax benefits for health savings account enrollees, and a universal tax credit-based system that would help individuals buy insurance on the open market.

The House committees are also struggling to deal with the tax credits established by the ACA to help individuals buy coverage on government-operated health insurance exchanges, and how to eliminate that system.

In place of the ACA subsidies, the House bill starting in 2020 would give tax credits – based on age instead of on income. For a person under age 30, the credit would be $2,000. That amount would double for beneficiaries over the age of 60, under the proposal.

Republicans are considering various proposals for the tax exclusion:

  • Cap the tax exclusion at a certain level, such as $10,000 in benefits.
  • Eliminate the tax exclusion altogether.
  • Phase out the exclusion over time.

 

The outline did not specifically state that any captured taxes would specifically be used to pay for tax credit, but analysts say that it would be funded this way.

 

Capped tax exclusion

If the capped method is implemented, it would likely set a maximum amount of benefits that would not be taxed – and any benefits over that amount would be taxed as salary.

 

Cap example

If Congress sets a cap of $8,000 for single coverage, a worker who receives $9,500 worth of health coverage paid for by his employer would not pay taxes on the first $8,000 in benefit. However, the remaining $1,500 would be treated as ordinary income and the full range of tax would be levied on the amount.

Both the employer and the employee would be exposed to the tax.

The danger is that the move could also spur states to adjust their laws to match federal law so that state income taxes are also captured on the benefit.

If talk of a cap sounds familiar, that’s because this is kind of how the ACA “Cadillac tax” was supposed to work. Under that measure, any health plan that is worth more than an established amount would be taxed at 40% for every dollar over the threshold.

The whole idea behind the Cadillac tax was that it would levy health plans that are deemed overly generous and hence do nothing to curtail the use of health services. But eliminating or capping the tax exemption would have no such effect, experts say.

We will keep you posted as the process develops.

 

Republicans Consider Fixing ACA, Not Repealing It

Pandoras box and scull smoke

The steamroller everyone expected from President Trump and the GOP-led Congress to flatten the Affordable Care Act has been put on idle and what was a promised quick outright repeal has morphed into a plan to “repair” the law.

In particular, Republican lawmakers, huddling while trying to devise a repeal-and-replace plan, have instead found that it won’t be so easy, unless they want to cut off millions of people from the health insurance they have purchased on exchanges.

They are most concerned with the political fallout should that happen, not to mention the fact that a repeal would also do away with the Medicaid expansion that has ensured that millions more low-income earners are covered.

With everything in flux now, as we mentioned earlier, it’s best to continue complying with the ACA as it still is the law of the land and it’s looking more and more likely that the law won’t be repealed, but will be changed. And lawmakers have indicated that they may have a fix on the table by the end of the year.

Top GOP lawmakers have publically stated that some parts of the law will remain intact and others will be “fixed.”

Surprisingly, the Republican leadership’s views on the subject will now likely align more with Democrats who have acknowledged the flaws in the law and that amending the law is the best way to go.

While conservative and Tea Party Republicans say the law can’t be fixed and should be repealed, their desired outcome is looking less and less likely. Also, there is no consensus within the GOP on what should come next.

Members of the conservative House Freedom Caucus held a press conference on Feb. 7 saying that Republican legislators should not go soft on their promise to repeal the law and instead should quickly introduce new legislation that would repeal the ACA.

They want to model the bill after legislation that Congress passed but President Obama vetoed – in 2015. That legislation would have repealed the mandate that individuals have health coverage and that companies with 50 or more employees provide employees affordable insurance.

It also would have ended federal subsidies to help people afford insurance under the ACA and scrapped funding for Medicaid expansion. It also gave lawmakers two years to come up with a replacement plan.

But it’s the leadership that decides which bills move forward and out of committee.

For now, Republicans are up against a self-imposed deadline after they passed a measure in January that allowed them to begin putting together a budget process that will undo parts of Obamacare.

Under that deadline, four congressional committees were supposed to have drafted legislation repealing the law by Jan. 27, however no bill was introduced. Now pundits say that may not happen until April.

Republicans are now considering four drafts, language from which they will likely fuse into one bill.

Without Democrats, Republicans are limited in how much they can undo the law.

Congress will have to walk a delicate path and find ways to help middle-class Americans, some of who have complained about high and skyrocketing insurance premiums. Others are worried about repeal because the ACA has given them access to life-saving treatment.

Also, there are other forces at play, including stakeholders like businesses, health insurers, drug companies and the medical industry, which all have their own agendas and will be lobbying hard.

For now, continue complying with the law and cover your employees if you are an applicable large employer – and file your papers with your staff and the IRS on time.

What Does President Trump’s Executive Order on ACA Mean?

Worker repairing  an engine rotor winding of copper wire.

Donald Trump’s first act after assuming the presidency was to sign an executive order that authorizes federal agencies to scale back as many parts of the Affordable Care Act as possible within the confines of the law.

The executive order does not abolish the landmark legislation, but sets the stage for agencies to act immediately on regulations that are deemed overly burdensome. The agencies, particularly the Department of Treasury and the Department of Health and Human Services (HHS), will have wide latitude in making regulatory changes thanks to the broad scope of the order.

But don’t expect immediate changes in the law. Regulations cannot be rewritten, amended or replaced without going through the rule-making process, which includes notice and comment periods. That can take months, or sometimes years.

Another reason you should not expect immediate change is that the order specifically states that agencies can act only “to the maximum extent permitted by law.”

The order came on the heels of the House of Representatives approving a budget blueprint that will allow Republicans to repeal major provisions of the ACA without the threat of a Democratic filibuster in the Senate. But that action can only undo parts of the law that have an effect on the federal budget and they would need some cooperation from Democrats to repeal other parts and forge a replacement.

That means that most of the laws and regulations governing employer plans will likely stay in place for the moment, although it’s unclear for how long.

Trump has been on record saying that the repeal of the law should not take place until a replacement plan is also in place, in order to avoid creating disruptions in the market. He also said that everyone in the United States would be covered.

Here are some of the more relevant passages of the executive order:

“…it is imperative for the executive branch to ensure that the law is being efficiently implemented, take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act, and prepare to afford the States more flexibility and control to create a more free and open healthcare market.”

It also said the HHS secretary and other agency heads “shall exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision… that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.”

As mentioned, the process for making regulations takes time. Proposed regulations have to be drawn up and they have to go out for public comment, including holding hearings so that all sides can argue for or against the changes or recommend adding more changes.

Adding more confusion and concern, Trump senior adviser Kellyanne Conway said that the president may stop enforcing the law’s tax penalty against people who don’t buy insurance. But that move alone could snowball into an ugly scenario where more healthy individuals bale out of their insurance policies, which in turn would likely lead to insurers abandoning the public insurance exchanges.

She said that he would consider repealing the employer mandate quickly, as well. But that may be not be legal as the individual and employer mandates are explicit provisions of the law passed by Congress, and they cannot be overridden by the executive branch.

Be Prepared for Changing ACA Landscape

Concept of problem in business

With president-elect Donald Trump and Congressional Republicans vowing to repeal the Affordable Care Act, employers that have spent the last few years preparing for and complying with the law have a right to be concerned about what’s in store.

While leaders in Congress have promised to swiftly put an end to the ACA, it’s not clear how fast it would happen, if at all, and what, if anything, would replace it.

Blue Cross/Blue Shield recently issued an alert about what its policy team had learned and is anticipating.

 

Administration moves

Blue Cross/Blue Shield noted that three executive actions could occur shortly after Trump is sworn into office:

  • His administration could order the Treasury Department and the IRS to stop enforcing penalties on taxpayers who do not enroll in health insurance.
  • The administration could stop defending lawsuits that challenge the legality of health insurance subsidies that are paid to insurers that insure low-income individuals who purchase coverage on public exchanges. If that happens, it could send shockwaves through the industry, financially affecting a number of insurance companies and leading to market disruptions, Blue Shield predicts.
  • The administration could prevent payments related to the transitional reinsurance program. Republicans have argued that payments from the program must go to the Treasury before health plans. The administration could redirect $5 billion owed to plans for the 2016 plan year, which would zero out payments that are expected in mid-2017.

 

Congressional action

Anything Congress will want to do in the near term will need bipartisan support because the minority-party Democrats could mount a filibuster in the Senate to keep any significant legislation from moving forward. However, Democrats’ hands would be tied if Republicans change the law during the budget reconciliation process.

Republicans could:

  • Move to repeal parts of the ACA that have implications for the federal budget, such as eliminating:
  • ACA tax credits
  • The Medicaid expansion
  • The individual and employer mandate penalties
  • Various ACA taxes used to pay for health reform.

 

That said, parts of the law that don’t affect the budget, like the ban on insurers from refusing coverage based on pre-existing conditions and dependent coverage to age 26, would need legislation.

  • Introduce legislation to kill the ACA and replace it with provisions they espouse, such as:
  • High-risk pools
  • Allowing individuals and businesses to buy insurance across state lines
  • Overhauling the Medicaid program.

 

For now though, the only thing employers can do is to watch what’s going on in Congress and follow developments with us. We’ll keep you posted on what’s happening.

Change could come suddenly, or it may be drawn out for years as repealing the law without a strong replacement would leave millions of Americans in a bind – and many of them would include the same people that voted for Trump as president and Republicans in Congress.

 

 

Republicans Unveil Two Proposals to Replace/Augment the ACA

Government Shutdown with magnifying glass. ++All text written by photographer. Image in page was taken by photographer ++

Republicans in June introduced two sweeping proposals for replacing or augmenting the Affordable Care Act, as they seek to blaze a trail they say will be better for both employers and individual Americans.

Rep. Pete Sessions, (R-Texas) and Sen. Bill Cassidy, (R-Louisiana), introduced H.R. 5284, which they call an “alternative” health care bill which will not repeal the ACA, but work alongside it and modify various parts of the system.

The so-called “Health Empowerment Liberty Plan” (HELP) includes conditions for helping Americans purchase health insurance, but also keeps in place ACA provisions that bar health insurers from discriminating against people with pre-existing medical conditions.

And later in June, a Republican task force convened by House Speaker Paul Ryan introduced a proposal that was not in bill form that would completely eliminate the ACA.

 

HELP!

Here are the major provisions of the proposed HELP Act:

Individual mandate out – It would eliminate the individual mandate to be covered for insurance either through your job or by purchasing a health plan through a public insurance exchange.

Employer mandate out – It would eliminate the employer mandate, which is the requirement that employers with 50 or more full-time workers purchase affordable coverage for them.

Exchanges still okay – The bill would also allow states to decide if they want to opt in or out of the Affordable Care Act. States that elect to remain part of the ACA would be able to keep their marketplace exchanges and Medicaid expansion programs in place.

For states that decide to opt out, U.S. citizens, including Medicaid beneficiaries, would be eligible for a $2,500 per individual, $1,500 per child tax credit, to be used towards the cost of employer-sponsored health insurance, invested in a Roth Health Savings Account or received as an annual payment.

New tax – The HELP Act would limit the tax exclusion for employer health plans to $2,500 per employee, exposing companies and workers to taxes for insurance benefits above that threshold.

Oddly, Republicans have heavily criticized the ACA’s “Cadillac tax,” which seeks to tax at 40% the portion of any employer-provided health plan that costs more than $10,200 a year.

Small employer purchasing power – The measure would also allow small employers to band together to purchase health insurance. Small employers should be able to “offer health care coverage at lower prices through improved bargaining power at the negotiating table with insurers just as corporations and labor unions do,” according to the proposal.

Minimum essential benefits out – The bill would abolish federal minimum essential benefits – a hallmark of the ACA – though it would allow states to regulate coverage.

People could buy cheaper limited-benefit plans with an annual cap on benefits. Those who buy such plans would receive asset and wage protection if their medical bills exceeded certain thresholds.

Competition and transparency – It would also limit how much insurers could charge for out-of-network services, require providers and plans to disclose prices, and deregulate physician-owned facilities, freestanding surgery centers, and retail clinics.

 

The task force proposal

The health care reform proposal released by the House Republican task force convened by Speaker Ryan would entail a full repeal of the ACA.

The proposal, which is broad in scope and short on specifics, would include a transition period out of the ACA and into a new plan. It would eliminate the individual and employer mandate and instead encourage people to have insurance coverage with the help of refundable tax credits that would be adjusted for the recipient’s age.

It would encourage small group health plans and provide $25 billion in incentives to states to set up high-risk insurance pools.

In place of the ACA’s individual mandate, the plan would prohibit insurance companies from denying patients coverage or charging them more because of pre-existing conditions – but only if they keep continuous insurance coverage, although they could switch plans or carriers.

It would also allow young adults to stay on their parents’ health plans until age 26, which is one of the most popular pieces of the ACA.

Under the proposal, insurers would be allowed to sell across state lines and medical liability laws would be reformed.

 

Government Shutdown with magnifying glass. ++All text written by photographer. Image in page was taken by photographer ++

Government Shutdown with magnifying glass. ++All text written by photographer. Image in page was taken by photographer ++