The Congressional Budget Office (CBO) estimates that House Republicans' legislation repeal and replace much of the Affordable Care Act (ACA) will reduce federal deficits by $337 billion and increase the number of uninsured by 24 million -- for a total of 52 million uninsured people -- by 2026.
While most of the projected coverage losses are in the individual market and under Medicaid, CBO projects that fewer people -- 2 million in 2020 and 7 million in 2026 – would enroll in employer coverage under the bill as a result of eliminating individual and employer mandate penalties while making tax credits available to a wider range of people (e.g., people with higher incomes). The GOP bill’s tax credits would only be available if an individual does not have an offer of health coverage from their employer or elsewhere. While these changes might cause some employers to offer coverage to fewer employees, CBO said employers may adapt slowly to the legislation given the uncertainties.
The projected coverage losses are heightening concerns by moderate Republicans - particularly in the Senate - about the House bill, while conservatives are demanding changes that could further increase the number of uninsured. Congressional GOP leaders and President Trump are discussing potential revisions to the bill ahead of a House vote that could happen within weeks, and the CBO is expected to issue new projections as the legislation changes.
President Trump and congressional Republicans left last week’s planning meeting in Philadelphia still divided over the timing and substance of how to repeal and replace the Affordable Care Act. The effort continues this week in Washington as congressional committees hold a spate of hearings and work on writing legislation.
House panels will examine problems within the Medicaid program, replacement options that focus on patient-centered solutions, and proposals to shore up the individual market. A Senate committee will also seek options for stabilizing the individual market and look at ways to allow states to pursue their own health care reforms.
Despite President Trump’s recent orders to ease ACA compliance burdens and freeze regulatory activity, the administration’s ability to implement policy and advise Congress is currently hobbled by the wait for Senate confirmation of leadership posts at the Department of Health and Human Services. The Senate Finance Committee is set to vote this week, however, on the nomination of Rep. Tom Price (R-GA) as HHS secretary. The panel has yet to schedule a hearing on the selection of Seema Verma as administrator of the Centers for Medicare and Medicaid Services.
With adoption of a fiscal 2017 budget plan on January 13, Congress has taken the first legislative step toward achieving Republicans’ plan to repeal much of the ACA under fast-track budget rules. The plan, or “budget resolution,” instructs House and Senate committees to write budget “reconciliation” legislation by a non-binding January 27 deadline that knocks out key parts of the law. GOP leaders aim to put a bill on incoming President Trump’s desk within weeks, but the timing and shape of a repeal measure -- and replacement legislation that's taken on new urgency -- is unclear amid party differences over legislative process and policy details.
Treasury and IRS have extended relief for employers that offer "opt-out arrangements" paying employees who decline employer-sponsored health coverage. In recently issued final ACA premium tax credit regulations, the regulators said they are still evaluating issues related to the arrangements. Until further guidance is issued, employers making opt-out payments are not required to increase the employees' required contribution for affordability purposes under employer shared responsibility provisions, unless the arrangement fails to meet standards for relief provided under prior guidance.
Final Department of Labor (DOL) rules require ERISA plans processing disability claims to treat coverage rescissions like benefit denials, impose more detailed denial notices written in a "culturally and linguistically appropriate manner," and expand claimants' response and litigation rights. The new rules generally apply for claims filed on or after Jan. 1, 2018, but transitional notice requirements apply for claims filed from Jan. 18, 2017 -- the final regulations' effective date -- through Dec. 31, 2017. While the new administration or Congress might delay, change, or even try to overturn the disability regulations, employers should still plan their next steps as the rules may remain intact.
Signaling that he is serious about rolling back the ACA, President-elect Donald Trump has chosen Rep. Tom Price (R-Ga.), one of Capitol Hill's fiercest critics of President Obama's health care law, to be Secretary of Health and Human Services. Price, an orthopedic surgeon and Chair of the House Budget Committee, is the author of one of the Republican ACA replacement plans, Empowering Patients First, which you can read about here.
Employers should be aware that Price calls for capping the tax exclusion. According to the article, “Price’s bill proposes limiting the employer-tax exclusion for insurance to $8,000 for individual policies and $20,000 for families... As popular as this provision will be with economists, you can bet that the public will hate it, as it would make some health plans significantly more expensive -- and face similar pushback to Obamacare’s Cadillac tax.”
It’s not a slam-dunk that his plan will be the replacement plan, but it does provide insights to what his preferences are. (Other Republican replacement plans that include a tax exclusion cap set a higher threshold -- $12,000 for individuals and $30,000 for families). As with the ACA’s excise tax, a cap on the tax exclusion would be a major focus of lobbying efforts for employers and advocacy groups like ABC, ERIC, and Fight the 40.
While Price’s replacement plan calls for eliminating Medicaid expansion, Trump selected Indiana health policy consultant Seema Verma to run the Centers for Medicare and Medicaid Services. Veerma has worked on redesigning Medicaid programs in states that have chosen to expand the program. She also spearheaded Indiana's healthcare reform efforts after the ACA passed to help health agencies prep for its implementation. So there could be some push and pull there.
There are significant differences between Price’s plan and those of other Hill Republicans. As HHS Secretary, Price won’t have the authority to replace the ACA himself. But he’ll be a key player in negotiations with Congress over which parts of which replacement plans they will choose, and he’ll control the replacement’s implementation. With this appointment, it seems the question now isn’t whether Republicans will move to repeal and replace the ACA -- it’s how quickly will they be able to coalesce around one option.
IRS Notice 2016-70 extends the 2017 deadline from Jan. 31 to March 2 for employers and insurers to furnish individual statements on 2016 health coverage and full-time employee status (Forms 1095-B and 1095-C). The notice also extends 2015 penalty relief to 2016 incorrect or incomplete reports due in 2017 if the preparer has made good-faith efforts to comply. The extension does not change the Feb. 28 (paper) and March 31 (electronic) IRS filing deadlines.
Final ACA rules issued Oct. 28 essentially adopt proposed rules on short-term insurance, certain excepted benefits, and essential health benefits subject to the ban on annual/lifetime dollar limits. The rules do clarify some deadlines. But regulators are postponing action to finalize earlier proposals on the excepted-benefit treatment of certain types of indemnity insurance and expatriate health plans. For now, employers and insurers offering expatriate health coverage can continue to rely on guidance in the proposed regulations.
Compliance with the Mental Health Parity and Addiction Equity Act is the focus of a host of federal initiatives announced Oct. 27. Along with releasing a final report from President Obama's Mental Health Parity and Substance Use Disorder Task Force and new ACA FAQs, regulators are stepping up MHPAEA enforcement reviews and consumer outreach efforts.
Changes in the way Medicare pays physicians are set out in a final rule released Oct. 14 by the Centers for Medicare and Medicaid Services (CMS). The rules will increasingly base doctors’ pay on their efficiency and quality of care. Effective Jan. 1, 2017, the rules begin phasing in Medicare’s Quality Payment Program (QPP) which generally offers two approaches to physician compensation: the Alternative Payment Models (APMs) and the Merit-based Incentive Payment System (MIPS). Providers participating in APMs will get higher payments.
The American Medical Association and other physicians' groups said CMS appears to have taken the needs of their members into account in these QPP rules implementing the law, officially known as the Medicare Access and CHIP Reauthorization Act (MACRA). Congress cleared the measure last year with strong bipartisan support. Other changes in the law will require more beneficiaries to pay income-based Part B and Part D premiums and limit future Medicare supplement products.
Final Department of Labor rules explain the nonretaliation protections for employees seeking subsidized health coverage from a public exchange, reporting certain ACA violations by an employer's group health plan, cooperating in ACA investigations or enforcement proceedings, or refusing to engage in activities that could violate the ACA. The rules leave intact interim regulations from 2013, with a few clarifications about complaint procedures and the scope of the law's protections.
IRS has released final instructions and forms for 2016 minimum essential coverage (MEC) reporting (Forms 1094-B and 1095-B) which health insurers and some self-insured employers will use to report MEC provided to individuals in 2016. IRS uses MEC reported on the forms to determine whether individuals owe assessments under the ACA's shared-responsibility provisions. IRS has apparently made only minor changes to the 2016 instructions from the version used for 2015 reporting. Drafts of the 2016 employer shared-responsibility forms and instructions that applicable large employers will use to report on coverage offered to employees and their dependents came out earlier this summer.
Proposed IRS regulations address several Affordable Care Act (ACA) reporting issues for group health plan sponsors and other providers of minimum essential coverage (MEC). The proposals give more detail on MEC providers' obligations to request covered individuals' taxpayer identification numbers (TINs), explain when supplemental MEC doesn't need to be reported, and address the use of truncated TINs, among other things. Employers that sponsor self-funded health coverage and have MEC reporting responsibilities will want to review the proposed rules, particularly the provisions on TIN solicitations.
New Health and Human Services (HHS) FAQs offer guidance on the non-English taglines required under final rules implementing Section 1557 of the ACA. Employers and employer-sponsored group health plans covered by the rules -- which appear to include most hospitals and health systems, as well as entities receiving retiree drug subsidy payments from HHS -- must comply with notice and tagline requirements by Oct. 16, 2016.
A federal court in Wisconsin has ruled that an employer may not rely on the Americans with Disabilities Act (ADA) safe harbor for bona fide benefit plans to justify incentives under its wellness program. But the court still decided the wellness program met the ADA exception for voluntary medical exams, even though employees who declined to participate in a health risk assessment had to pay the full cost of their health coverage. This is the first ruling to find the ADA safe harbor for bona fide benefit plans does not apply to wellness programs under the final Equal Employment Opportunity Commission rules. The court did not apply the 30% limit on incentives in the EEOC rules as it concluded that component of the rule does not apply retroactively (the case involved incentives offered in 2009).
Annual cost-sharing limits for nongrandfathered group health plans would increase to $7,350 for individuals and $14,700 for families in 2018, under a recent CMS proposal. This marks a 2.8% increase from the 2017 limits, which cap out-of-pocket costs for in-network covered essential health benefits under nongrandfathered group health plans at $7,150 for self-only coverage and $14,300 for broader coverage.
Applying the same premium adjustment percentage to employer shared-responsibility assessments, the play-or-pay assessment for not offering coverage would increase to $2,320, while the assessment for offering coverage that is unaffordable or lacks minimum value would increase to $3,480 for 2018.
The Department of Health and Human Services' Office for Civil Rights (OCR) has launched an initiative to more widely investigate HIPAA breaches affecting fewer than 500 individuals. Historically, investigations have focused on breaches involving protected health information (PHI) of 500 or more individuals, but OCR now intends to shift more attention to the root causes of smaller breaches. OCR believes breach investigations allow it to better understand industry-wide compliance problems as well as compel corrections for entity-specific deficiencies.
The IRS has released draft instructions for 2016 Forms 1094-B and 1095-B, confirming that health insurers and self-insured employers can expect few changes when reporting minimum essential coverage (MEC) provided to individuals in 2016. The Service posted preliminary 2016 versions of these forms in June, but instructions noting what's new became available only last week. The IRS uses data from this reporting to administer assessments under the Affordable Care Act’s individual mandate provisions. Separately, the IRS earlier released draft 2016 employer shared-responsibility forms and instructions that applicable large employers will use to report coverage offered to employees and their dependents.