Congress Passes the AHCA...What's it Mean for Employers?
The House of Representatives passed the American Health Care Act (AHCA) on May 4.
Taking a “we’ll make some changes, then the Senate makes some changes” approach to repealing and replacing Obamacare, the Senate assures that the bill is far from earning the simple majority required to pass in the Senate and land on President Trump’s desk. To the contrary, many in the Senate called the bill “dead on arrival.”
What are employers to take away from it all? We are a far cry from repeal and replace. For at least another year we can expect the Employer Shared Responsibility Mandate to remain intact, to include annual 1095-C reporting for employees and the IRS.
That being said, 1095-C reporting was never on the chopping block for this particular bill. As we shared in previous blogs, the bill proposed by Republicans in the AHCA is budget reconciliation legislation. Through budget reconciliation, legislation changes are constricted to policies and procedures that directly impact the federal budget—specifically, federal spending and taxation. While passage of the AHCA in the Senate has the ability to rob the Affordable Care Act of its teeth by zeroing out penalties, annual 1095-C reporting would remain the law of the land until a complete repeal.
ACA Provisions Not Impacted By the AHCA
Under the AHCA, the following provisions of the Affordable Care Act would remain intact:
- Cost-sharing limits on essential health benefits (EHBs) for non-grandfathered plans (currently $7,150 for self-only coverage and $14,300 for family coverage)
- Prohibition on lifetime and annual limits for EHBs
- Requirements to recover pre-existing conditions
- Coverage for adult children up to age 26
- Guaranteed availability and renewability of coverage
- Nondiscriminatory rules (on the basis of race, nationality, disability, age or sex)
- Prohibition on health status underwriting
AHCA Offers Enhancements to Health Savings Accounts
Through the AHCA, proponents are working to incentivize the use of Health Savings Accounts (tied to High Deductible Health plans (HDHPs)) by:
- Increasing the maximum HSA Contribution
- Allowing both spouses to make catch-up contributions to the same HSA
- Addressing expenses incurred prior to establishment of the HSA
Health Savings Accounts offer a triple tax benefit—participants can contribute pre-tax, the money grows tax-free, and withdrawals are tax-free for eligible medical expenses.
We're staying on top of the AHCA and repeal and replace, so be sure to sign up for regular updates by subscribing to our blog. For more on leveraging HSAs or introducing a section 125 benefit option to your employees, check out our blog, Three Pitfalls when Moving from FSAs to HSAs.