As you’ve heard in the media, repeal and replacement of the Affordable Care Act (ACA) continues to be a top priority for the incoming administration. But as information on the fate of the ACA continues to unfold, it’s hard to know exactly how, what or when changes will be made. How will decisions impact employers from a complexity, cost and planning perspective? This month, the answers to many of these questions could become clearer.
Here are the top 3 things to watch for this January:
1. Timing of repeal
If Senate leaders make good on their promises, a budget resolution bill that will “repeal” pieces of the ACA legislation (by zeroing out penalties or subsidies) could be on the Oval Office desk as early as January 20. There have been conflicting messages about whether pieces of the ACA will be repealed immediately, or repealed with a delay in implementation – likely somewhere between two and four years. Along with Senate Democrats, there are also some Republican Senators who have expressed concern over repealing without replacement. Employers could be significantly impacted by this timing decision.
2. What will actually be repealed?
With a budget resolution bill, Congress could potentially eliminate penalties and subsidies, but not laws that mandate, for example, coverage of pre-existing conditions, or allowing coverage of dependents through age 26. If the employer mandate penalty is “zeroed out”, it’s likely employers are still at risk for penalties, as it may not eliminate the penalty for late or non-reporting. Similar to penalties associated with not filing a W2, employers could be penalized over $3 million for late or non-reporting ($260 per return up to $3,193,000 for missing timelines and the same penalty for not reporting).
3. How will the legislation be replaced?
New laws take time to write, pass, and set in motion in terms of administration, as we have seen with the ACA. Unlike the budget resolution process that will be used to repeal the ACA, Democrats will have enough votes in the Senate to filibuster any replacement legislation, which could cause significant delay. As we move forward into 2017, Health e(fx) will be watching out for new compliance and reporting requirements (e.g., tax credits) and the timing and potential impact to large employers.
Regardless of what happens this January, it’s likely that healthcare reform will be a long-term, lengthy process that could get more complex before it gets better.
Employers must understand the impact of healthcare reform on their business in order to effectively forecast, plan and budget. We’re here to help. Health e(fx) is specifically designed to help employers manage complex business challenges related to an ever-changing healthcare environment.