Employer Action Plan in Wake of Continued ACA Uncertainty

ACA Action Plan: Stay the Course

In early May, after a couple of unsuccessful attempts, the U.S. House of Representatives narrowly passed the American Health Care Act (i.e. the GOP-sponsored, reconciliation bill to “repeal and replace” the Affordable Care Act).

This is just a beginning step in the legislative process. For the bill to become a law, the proposed House legislation must pass in the Senate. The Senate, which is far more moderate than the House, will need to make significant changes to the bill to get the votes needed to pass. The revised bill will then need to go back through the House. NPR provides a clear explanation as to why it’s doubtful the AHCA will ever become law – at least in its current iteration.

If, in the unlikely chance the bill passes both houses, the AHCA as it currently exists changes the Employer and Individual mandate penalties to $0. Employer reporting, however, will continue to be required. It is yet to be seen whether penalties for not reporting will be enforced. The bill also begins to move more healthcare responsibility to the states.

This means, despite the House vote, the ACA remains the law and compliance and reporting will continue to be required for at least the near term. At the same time, it’s more evident than ever that healthcare reform will continue to evolve. The impact and scope of these changes are not yet known, leaving many questions from employers on how to best move forward.

On top of healthcare reform, a recent report from the Treasury Inspector General for Tax Administration (TIGTA) tells us the IRS is developing a system to identify noncompliant employers in mass. This sends a signal that non-compliance penalties may be enforced.

Action Plan to Prepare for Change

So, what should employers do? Below is Health e(fx)’s recommended action plan for employers to continue complying and planning for the future, even if the risk of penalties is removed at some point down the road.

  1. Stay on top of ACA legislative and regulatory activity
  2. The last few months have been quite busy on Capitol Hill. We’ll continue to monitor action on the Hill, as well as legislative and regulatory changes as they happen. We’ll keep you posted with updated communications and blog posts. Follow us on LinkedIn and Twitter for weekly updates.

  3. Continue your current reporting path for 2017
  4. Reporting is required for 2017 just as it was in 2016 – and non-compliance, as well as late or non-reporting penalties, are still part of the law today. Staying the course carries the least amount of risk. Here’s the business case for continuing to comply with the Employer Mandate in the midst of reform:

    • The IRS is preparing a system to assess employer compliance in mass, which is an indicator that penalties, including penalties for non-compliance, may be enforced.
    • You can’t afford late reporting fees, which can remain even if the Employer Mandate compliance penalties are eliminated or not enforced. (Similar to penalties associated with not filing a W2, late or non-reporting can cost employers over $3 million ([$260 per return up to $3,193,000] for missing timelines and the same penalty for not reporting).
    • You want to be ready for potential state-level requirements (e.g., Washington, Massachusetts, California) as well as new reporting requirements (e.g., tax credits) if new legislation is passed.
    • Your workforce structure is complicated and you want to continue to easily calculate complex eligibility and know when to offer coverage, with or without the law.

  5. Be prepared for greater complexity
  6. Make monthly management and submission of ACA data a priority. Use the time between reporting seasons to improve the quality of your data to be prepared for greater complexity. Compliance and reporting could get more complicated before it gets easier. For example, with most recent Republican ACA replacement proposals giving more power to the states, businesses that operate across state lines should be prepared for a wave of complicated state laws.

  7. Understand how changes may impact you in the future
  8. Our analytics capabilities provide invaluable insights into the impact of eligibility and coverage decisions for your company’s unique populations. Coming soon, we’re updating our analytics platform so clients can more easily model the financial impact of legislative or regulatory changes for their populations, such as the impact of eliminating coverage mandates.

Employers need a partner that thrives on complexity and is built to adapt to change. Health e(fx) is specifically designed to help employers manage business challenges related to an ever-changing healthcare environment. We offer the leading solution for supporting employers through healthcare reform.

What do you think about our action plan? Contact us at news@healthefx.us (or your Client Service Representative) with any feedback or reactions to this blog post.