The Affordable Care Act – the repeal/replace saga continues

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Just when we thought the Affordable Care Act (ACA) repeal/replace effort was off the table for this year, two executive decisions that impact the ACA are made. It is important to note, however, that neither impact the employer mandate so our advice remains the same: stay the course for 2017 employer reporting.

Two executive decisions on October 12

  1. President Trump signed an Executive Order called “Promoting Healthcare Choice and Competition across the United States” with the intent of making changes to the ACA. The order does not take any specific action, but instead instructs the Secretaries of the Treasury, Labor, and Health and Human Services (the “Agencies”) to consider proposing regulations or revising existing guidance in 3 key areas:
  • It directs the Secretary of Labor to consider revising existing rules to expand access to Association Health Plans (AHPs) within 60 days.
  • It requires the agencies to consider revising rules to expand the availability of Short-Tem, Limited Duration Insurance (STLDI) within 60 days.
  • The Agencies must address expanding employers’ ability to use Health Reimbursement Arrangements (HRA’s) to reimburse employees for non-group (individual) coverage that they purchase within 120 days.
  1. The administration also confirmed that it will not make the cost sharing reduction payments (“CSRs”) to insurers under the ACA. This affects mainly the individual insurance market with likely higher premiums but can also indirectly impact the employer plans by having individuals choosing the employer plan over the (now more expensive) individual plan.

For more detailed information on this, see this great blog from HUB International

What’s next?

The bipartisan talks between Senators Murray (D-WA) and Alexander (R-TN) lead to a deal on a proposal intended to stabilize the ACA’s insurance market on Oct 17. Key elements include:

  • The CSR payments would be guaranteed for 2 years.
  • "Outreach funding" cut by the Trump administration would be restored.
  • Changes that make it easier for states to apply for “waivers” that would allow them to experiment with different ways to provide and subsidize health insurance.
  • Allowing the sale of “catastrophic” plans in the health exchanges, also for those over 30.

Now it remains to be seen if that can pass the Senate, the House and gets the President’s signature.

Impact on employers?

There is no immediate impact to employers from either executive decision. However, both actions could have significant impacts down the road such as premiums for employer coverage increasing as well (insurance companies have to make up for the CSR’s somewhere) so fingers crossed that a bipartisan deal can pass.

It is important to note, however, that none of this impacts the employer mandate so our advice remains the same: stay the course for 2017 employer reporting.

Not sure what that means? Download our free 2017 checklist to find out!

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