ACA to AHCA… A Look Back on the Past 7 Years

By: Jen McCormick, Esq.

Last Monday, the House Republicans finally had their chance to offer their version of a health care bill.  The American Health Care Act, or AHCA, noted as the repeal and replace measure of the current version of the Affordable Care Act, or ACA, actually seems to have more in common with the ACA  than I would have expected.

Many of the compliance related changes we’ve made to self-funded health plans over the years to comply ACA seem to remain intact – as of right now.  For example, AHCA keeps the following:

  • Maximum out of pocket costs;
  • Continued coverage to age 26;
  • Coverage for individuals with pre-existing conditions (updated with a continuous coverage requirements or subject to 30% surcharge in certain instances); and
  • Prohibition of lifetime and annual dollar limits.

 

AHCA, however, would eliminate one change that’s been challenging for employers and their plans – the penalty associated with the employer mandate.  Without digging into the weeds too much, AHCA is part of the budget reconciliation process, so the bill only addresses budget related provisions.  So, while the penalty is eliminated, the (tedious) reporting requirements will remain.  As written, it is confusing as to whether the penalty is eliminated retroactively to 2016 … and if that’s the case what happens during this tax filing period?

Some would argue that the AHCA would be a chance for employers to offer a plan that is in their minds cost-effective and flexible for their employees. Employers likely appreciate the additional delay of the Cadillac tax until 2025.  I would note that this freedom may come at a cost.

AHCA not only eliminates many of the taxes in place (i.e. net investment income tax, indoor tanning tax, medical device tax, additional Medicare tax), but will phase out the Medicaid expansion in the next 3 years (i.e. costing many people insurance options).   We’ll have to see, but I’m not sure how this will be less costly or achieve the goal of “insurance for everybody.”