Revised Version of Health Reform Still Lifts Burdens for Employers

The U.S. House of Representatives narrowly passed a revised version of the American Health Care Act (AHCA).

So, what changes were made to allow President Donald Trump to get enough votes to pass this time? With the previous version, major hold-outs were members of the conservative House Freedom Caucus who said the proposed bill retained too many elements of the Affordable Care Act (ACA). The Freedom Caucus was especially concerned with provisions regarding essential health benefits.

James Gelfand, SVP of Health Policy, at the ERISA Industry Committee (ERIC), based in Washington, D.C. says the new bill shored up conservative support by allowing states to impose work requirements in Medicaid, and giving states the option to apply for a waiver to suspend certain ACA insurance rules. Steve Wojcik, vice president, public policy at the National Business Group on Health (NBGH), who is based in Washington, D.C., says an amendment allows states to have flexibility in defining essential health benefits, especially for individual and small group markets. And, according to news reports, states would also have flexibility in making rules for pre-existing health condition coverage.

Gelfand adds that it shored up moderate support by creating a $15 billion invisible high risk pool to help people with high premiums, and an $8 billion fund to help people adversely affected by suspension of community rating rules in their state.

However, research from Willis Towers Watson suggests that employers expect to retain some of the ACA’s popular provisions, “even if they are not required to by a new law.” Julie Stone, a national health care practice leader at Willis Towers Watson, said in a press release, “Employers are more likely to retain some of the popular ACA benefit provisions because of their positive impact on employee engagement and the potential for changes to be viewed negatively in the context of overall rewards.”

NEXT: Positive impact on employers

In a statement, ERIC said the House passage of the AHCA is a positive step forward. ERIC notes the AHCA would help to eliminate many burdens on employers by:

• Repealing the employer mandate;
• Repealing numerous taxes that raise the costs of health insurance and health care, such as the taxes on pharmaceuticals, over-the-counter medicines, and limitations on flexible spending accounts; and
• Further delaying the Cadillac tax.

Wojcik says to the extent individual and employer mandates go away, a lot of reporting that hinges on that will go away. But, he notes it will require additional regulations to undo reporting.

Wojcik adds that ERIC is not expecting and has not heard anything from its members on the issues of state flexibility for essential benefits and pre-existing condition. “They are more interested in the excise tax [on high-cost health plans] being delayed to 2026,” he says.

“The Cadillac tax is really the threat to robust health plans. If it stays in place, it will put pressure on employers to scale back benefits,” Wojcik notes. “It would be a win-win for employers and employees for this to be delayed and ultimately repealed.” ERIC is working with lawmakers to get the tax repealed.

He says it is hard to speculate whether the bill will pass in the Senate, “but from what we’re hearing, the Senate is going to be very deliberate and likely make big changes to it. A vote may take a while." Employee groups and certain non-profits advocacy groups have expressed concerns that many will lose coverage under the new law. And, New York Attorney General A.G. Schneiderman has vowed to challenge the law in court if it passes and is signed by the president.

“We’ve been telling our members that for now nothing changes, and the ACA is the law of land. They have to keep complying,” Wojcik says.