On June 22, the United States Senate released its long-awaited version of an ACA reconciliation bill, titled “The Better Care Reconciliation Act of 2017” (BCRA). The bill is unexpectedly similar to the unpopular American Health Care Act (AHCA) that was passed by the House in May. The Senate delayed a vote on the BCRA that was planned for June 29, and intends to reschedule the vote after the July 4th holiday.
Here are three things to know about the bill, the process to move legislation forward, and how Health e(fx) is prepared to adapt to changing needs:
The bill changes but does not eliminate the need for employer reporting
- If the bill passes, there are three major components that will impact employer compliance and reporting:
- Employer mandate
The bill retroactively eliminates employer mandate compliance penalties for tax years beginning after December 31, 2015.
- IRS Reporting
IRS reporting will continue to be required through the 2019 reporting year, at a minimum. During this time, eligibility for premium tax credits (which will be available until 2020) will continue to be based on an employee’s access to affordable, quality healthcare; therefore, employers will be required to continue to report.
- State complexity
The bill broadens the use of 1332 Waivers, which give more power to states to make healthcare decisions. This means, multi-state employers who have typically worked to comply with one Federal law, the ACA, may soon have multiple sets of requirements in every state where the business operates.
- Employer mandate
2. The Senate CBO score indicates loss of coverage, reduced deficit
The Congressional Budget Office (CBO) released its score for the Senate health care bill in late June, with findings similar to the House bill scoring. Here are the key findings.Coverage
- Over the next decade, the BCRA would leave 22 million more Americans without health insurance.
- This leaves a total estimate of 49 million people under the age of 65 that would be without healthcare coverage by the year 2026, as compared to an estimate of 28 million in the same period under the ACA. For 2018, the CBO estimates 15 million more Americans will be uninsured than under current law.
- Of those individuals who receive tax credits to assist with purchasing Marketplace Exchange insurance, many may have insurance that does not cover major medical expenses.
- In 2018 and 2019, the BCRA would cause premiums to increase in the individual market by an average of 20 percent and 10 percent respectively, with the potential for higher increases for lower income and older Americans.
- Average premiums for individual market insurance will eventually decline, with premiums in 2020 to be about 30 percent lower than under the ACA. This is driven, in part, by loosened coverage requirements (which will result in less coverage, shifting costs to the individual) and federal spending that will directly lower premiums.
Federal Budget Impact
- The BCRA would reduce the federal deficit from 2017 to 2026 by $321 billion.
- The major components impacting the budget deficit include $772 billion in reduced Medicaid funding and $408 billion in reduced subsidies.
- Offsetting these savings are: $541 billion from repeal or delay of taxes and penalties, including repealing a surtax on net investment income and repealing annual fees on health insurers, $107 billion to reduce premiums, and $210 billion from reduced collection of employer and individual penalty payments.
Republican leaders have an uphill battle to pass the bill. Fifty votes are needed to pass the reconciliation bill in the Senate. This means Republicans can only afford to lose two Republican votes, assuming no Democrats will support the bill and Vice President Pence will provide the tie breaking vote.
If the new bill passes in the Senate, it will go to the House and Committee process as the final bill must have both houses in lock step on language and process. It will then go to Committee vote. If it passes through the Committee, President Trump will need to sign the bill as the final step for it to become a law.
3. Health e(fx) is prepared for the possibility the Senate bill will become law.Since our inception, Health e(fx) has focused on proactively addressing legislative changes at both federal levels. For example, our system supports compliance with the December 2016 – Seattle Initiative 124 that requires large hotels to comply with specific benefit eligibility standards for its workers. This is just one example of how we monitor and adapt to changes as they happen.
The fate of the ACA has been uncertain for several months now. Regardless of what happens in the Senate, we continue to invest in our solutions so that they remain up to date with changing legislation and requirements. We’re leading through change and will continue to offer fast and flexible solutions as new healthcare requirements evolve.