Benefits

Provisions Lawmakers Are Seeking in Health Reform

The U.S. House of Representatives did not vote on the new health bill as planned Thursday, but a look at why they didn’t and the provisions of the bill show what lawmakers are seeking—some of which would reduce costs and burdens for employers.

By Rebecca Moore editors@plansponsor.com | March 24, 2017
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UPDATE: Since this article was pubished, House Republican leaders pulled their legislation to repeal the Affordable Care Act from consideration on the House floor Friday afternoon. PLANSPONSOR will continue to monitor the progress of any health care legislation going forward.

“Nothing in the proposed [American Health Care Act] will increase administrative burdens and costs for employers,” says Steve Wojcik, vice president, public policy at the National Business Group on Health (NBGH), who is based in Washington, D.C.

In fact, a survey of NBGH members found the excise tax on high-cost health plans (Cadillac tax) and the employer and individual mandates were the biggest provisions of the Affordable Care Act (ACA) employers were strongly in favor of repealing and would affect them the most. The American Health Care Act (AHCA), in its amended form, would delay the Cadillac tax until 2026 and repeal the ACA’s individual and employer mandates effective after December 31, 2015.

According to an article by an attorney at the Proskauer law firm, the AHCA does this by “zeroing-out” the penalties for not having minimum essential coverage (individual mandate) or for not offering adequate minimum essential coverage to full-time employees (employer mandate).

Wojcik says NBGH surveys show most employers would not change benefits if the employer mandate was repealed, but sectors such as retail, hospitality and entertainment would adjust who is covered and what type of coverage. “In the past, since paychecks were not big for employees in these sectors, employers may have offered slimmed down benefits. This trend may come back so employees will have affordable benefits,” he says.

A client update by Segal Consulting, says the individual mandate would be replaced by a new continuous coverage requirement under which, beginning in 2019, individuals would pay a 30% premium surcharge if they have a coverage gap of more than 63 days during a 12-month look-back period. The surcharge would last for the entire plan year and would take effect in 2018 for mid-year enrollments.

NEXT: Reporting requirements and other provisions

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