Affordable Care Act: What to expect in 2019 and beyond

In November 2018, Democrats secured 218 seats in the mid-term elections to gain back control over the House of Representatives and deliver a decidedly pro-ACA House of Representatives. Demand for health insurance, without pre-existing condition exclusions, remains high across the country.

With the House under Democratic control, Congressional opponents of the ACA now lack the votes for a full repeal of the law. Yet, threats to the law still exist. And changes continue. What’s the current state of the ACA? Read on.

Threats to the law continue
While the November elections can be seen as a victory for the ACA, the law is hardly safe from challenges. Federal Judge Reed O’Conner’s recent ruling that the ACA is itself unconstitutional is a perfect example of this. However, Democrats promised in their campaigns last year to protect the ACA. So following Judge O’Connor’s ruling, the House voted 235 to 192 to approve the right to intervene in any litigation involving the healthcare law. House Speaker Nancy Pelosi will join California Attorney General Xavier Becerra and 17 other attorney generals in an expedited attempt to intervene in the case. Judge O’Conner’s ruling will likely be overturned — but the ACA’s battles in the judicial third of our government are only part of the story.

You can expect the ACA to continue to face opposition from the executive branch of the government. President Trump is a vocal opponent of the legislation and continues to use his considerable executive power to undermine the ACA.

For example, President Trump has issued Executive Orders aimed at expanding the flexibility and use of Health Reimbursement Arrangements (HRAs), Association Health Plans (AHPs) and short-term health plans, sometimes referred to as “skinny plans” which have historically provided less coverage and/or pre-existing condition exclusions.

The ACA is becoming more entrenched in the fabric of the United States
The fight is ongoing, but for the ACA, the outlook today is better than it was before the day of President Trump’s inauguration. Here’s why:

  • The public supports coverage of ACA provisions, including pre-existing condition protection
    A November 2018 Kaiser Family Foundation poll found an overall 53 percent have a generally favorable opinion of the law. Yet, when you look further to opinions about the law’s provisions, in many cases, views are much more favorable, regardless of political party. For example, 90 percent of Democrats and 66 percent of Republicans have a favorable opinion of the provision that allows young adults to stay on their parent’s health plan until they are age 26. And, 70 percent of Democrats and 58 percent of Republicans are in favor of the provision that prohibits insurance companies from denying coverage because of a person’s medical history.
  • Despite all the noise, it’s been business as usual
    Employers continue to offer health coverage and individuals continue to enroll despite efforts to scale-back the ACA. A 2018 Kaiser Family Foundation employer benefits survey found employer-sponsored insurance covered approximately 152 million nonelderly people in total. Nearly all large firms offer health benefits to at least some of their workers. While the individual mandate penalty for not being insured has been reduced to zero for 2019, 8.5 million individuals enrolled this year (only slightly down from 8.8 million for 2018).
  • The IRS continues to assess ACA employer penalties for non-compliance
    With the White House Administration working to undermine the ACA, employers may have had the impression that the employer mandate would not be enforced. However, this has not been the case.

A year ago the IRS began issuing Letter 226-J to notify employers who may not have complied with section 4980H(a) and (b) of the ACA employer mandate during the 2015 tax year. Recently, the IRS has started issuing Letter 226-J notices for failure to comply in tax year 2016.

  • Medicaid expansion is not just for Democratic states
    While Medicaid continues to be tested with work requirements and proposals for block grants, Medicaid expansion under the ACA continues. Currently 36 states are participating in Medicaid expansion with more to follow. After the elections, Idaho, Nebraska and Utah — three states in previous opposition to Medicaid expansion — overwhelmingly supported ballot initiatives to expand Medicaid. Maine voters passed a Medicaid expansion ballot initiative in November 2017, but former Governor Paul LePage refused to adhere. Governor Janet Mills took office January 3 and her first executive order instructs the Maine Department of Health and Human Services to work with the federal government to implement the expansion by February 1. The election also saw two more previously anti-expansion states — Kansas and Wisconsin — elect Democratic governors who are proponents of expansion.

Keep an eye on state-level activity
Due to relaxation of federal rules and the exemptions to the law’s individual mandate starting in 2019, states have been looking for opportunities to stabilize healthcare markets and to continue to provide affordable healthcare to their constituents. While states are approaching healthcare eligibility and affordability in different ways, several states have enacted or are considering enacting their own versions of an individual mandate.

  • Washington D.C., Massachusetts and New Jersey have passed their own version of an individual mandate and are already in effect
  • Vermont has passed a version of the individual mandate that will begin on January 1, 2020
  • Vermont and Massachusetts also have an employer healthcare contribution requirement
  • Other states have legislative proposals for an individual mandate, including: California, Connecticut, Hawaii, Maryland, Minnesota, Rhode Island and Washington

Requiring individuals to have health insurance can be unpopular and add significant political pressures, yet many states view the ramifications of not having a mandate to be more problematic.

The adjustments to state laws could add complexity to employer health reform compliance and reporting. While there are many unknowns on the impact of these state-based changes, it is expected that the states that require individuals to carry coverage will need a way to validate that an employee has coverage either on an exchange or through an employer—state-specific tax forms are a likely solution.

Never a dull moment in health reform, Health e(fx) keeps our clients updated as changes happen. Our clients can have peace of mind knowing their compliance and reporting is in good hands, and that they will stay in lockstep with evolving compliance and reporting obligations.

To stay up-to-date on all the latest news on the ACA, follow our updates. Or contact us today to find out how we have grown to be the largest ACA software provider, serving 17.6 million.

January 28, 2019

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