Provisions of Senate Health Reform Could Negatively Impact Employers

While the Senate health care reform bill reduces costs and administrative burdens for employers, provisions affecting individuals and employees could cause a residual negative impact on employers and many have conflicted views about the bill, one benefits professional says.

By Rebecca Moore | June 28, 2017
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Shan Fowler, senior director of Product Strategy at Benefitfocus, based in Charleston South Carolina, says since the passage of the Affordable Care Act (ACA) he has taken on the role of policy expert to help employers navigate changes created by health care law.

He tells PLANSPONSOR that Republican leadership on both sides of Congress have indicated they want to put more into supporting employer-based benefits.

Some significant pieces of the Senate version of the legislation appear to be similar to that of the House version. It repeals the employer and individual mandates, reduces taxes, removes the annual contribution cap on health flexible spending accounts (HFSAs) and increases annual contribution limits for health savings accounts (HSAs).

The Senate version also keeps many of the provisions of the Affordable Care Act (ACA) that were popular with employers, including the requirement to cover dependent children through age 25. The only ACA provision in the House bill that was changed in the Senate bill is allowing states to define essential health benefits.

Fowler says the Senate version of the bill still allows for subsidies for people who do not get coverage by employers. “They seem more generous than in the House bill. The Senate bill maintains an income-based approach to subsidies as used in the ACA, rather than the House version’s age-based approach, but rather than letting subsidies go to people who make up to 400% of the federal poverty level, the Senate bill cuts that down to 350%,” he says.

Fowler notes that this means employers will still have some kind of reporting, such as 1094 and 1095 reporting so the government can know if a person is eligible for employer coverage. However, look-back reporting would seemingly go away because of the repeal of the employer mandate.

One change made in the Senate version of the bill is the removal of the continuous coverage requirement. The House bill included a provision that 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 Senate bill is generally good for employers,” Fowler says.

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