American Health Care Act Update

On Monday, March 6, 2017, the House Ways and Means Committee and Energy and Commerce Committee each released separate legislative recommendations as part of Republican efforts to repeal and replace the Patient Protection and Affordable Care Act (ACA).

The anticipated legislation is tentatively being called the American Health Care Act.

Recommendations of the American Health Care Act include:

  • Eliminating the “employer mandate” and “individual mandate” by eliminating penalties retroactively to January 1, 2016.
  • Allowing carriers to charge a 30% premium penalty to purchasers of individual coverage who allow coverage to lapse and then reinstate coverage.
  • Modifying flexible spending account (FSA) and health savings account (HSA) restrictions and permit greater individual contributions beginning in 2018.
  • Taking away current subsidies to low income purchasers of insurance, but instituting a means-tested tax credit.
  • Transitioning Medicaid to a “per capita allotment” to the states, giving them much greater discretion to decide how the money will be spent.
  • Defunding Planned Parenthood.
  • Allowing insurers to charge older customers five times as much as younger ones, rather than the current limit of three times (states would be able to create their own ratios).

Certain popular features of the ACA and the tax code would remain, including:

  • The current tax treatment of employer-sponsored health care coverage.
  • Prohibitions on insurers denying or charging more for coverage based on pre-existing conditions.
  • Allowing dependents to remain on their parents’ plan until age 26.
  • Prohibitions on annual and lifetime insurance limits.
  • “Essential health benefits” – 10 benefits including maternity care and preventive services that insurers must offer.

The recommendations would also affect certain provisions of the ACA which have yet to take effect, including:

  • Repealing the Health Insurance Tax (currently suspended until 2018).
  • Repealing the Medical Device Tax (currently suspended until 2018).
  • Delaying the effective date of 40% “Cadillac Tax” on high value benefits plans to 2025.
  • Freezing and then phasing out the ACA Medicaid expansion provision, which extended Medicaid eligibility to childless adults with low income levels.

While these recommendations provide the most detailed picture yet of House Republicans’ intentions, they are a long way from becoming law.

Senate opposition is expected, and many conservative Republicans feel that these proposals are too close to the ACA, the repeal of which was a key promise they made in the recent election cycle.

At this time, there is no change to existing requirements and no need to change current practices.  Oasis will continue to closely monitor developments and update its clients as needed. Interested in learning more about how Oasis Outsourcing can help your company navigate Healthcare Reform and other HR-related legislation? Click here for more information.

New Research: How Will These Workforce Challenges Impact Your Business?

Privacy Legal Sitemap
©2001-2019 Oasis, a Paychex® Company. All rights reserved.