Late Friday, March 24, 2017, the U.S. House of Representatives canceled a vote on the proposed Affordable Care Act (ACA) replacement plan, called the American Health Care Act (AHCA). According to House leadership, the Republicans didn’t have enough votes to pass the House, and so House Speaker Paul Ryan (R-WI), after discussing with President Trump, canceled the vote. Following the cancellation, both Ryan and Trump stated that the ACA repeal and replace efforts will be on the back burner for now, as Congress will move forward with other initiatives, including tax reform.
The AHCA Plan
The AHCA would have repealed penalties associated with the ACA’s individual and employer mandates, repealed the health insurance tax on insurers and the health FSA contribution employee contribution limits, and allowed reimbursements from HSAs, FSAs and HRAs for over-the-counter (non-prescription) medication. For HSAs, it would have increased contribution limits and loosened reimbursement rules. Lastly, the AHCA would have delayed the Cadillac tax until 2025 and created new refundable tax credits (based on age) as a replacement for the ACA’s premium tax credit system.
The AHCA faced an uphill battle from its introduction, as Republican factions were never fully on board. Specifically, the House Freedom Caucus, a conservative group within the House led by Rep. Mark Meadows (R-NC), wanted the AHCA to include a wider repeal of the ACA, including repeal of the ACA’s prohibition on lifetime and annual limits, and essential health benefits requirements. Ultimately, despite their determination, House leadership could not both appease the Freedom Caucus and maintain support from other, more moderate House Republicans.
Looking forward, it’s unclear how Congressional Republicans and President Trump will proceed with their ACA repeal and replace efforts. Rep. Ryan stated that the ACA is the ”law of the land” for the foreseeable future, and Trump said he’ll let the ACA “explode.” Both hinted at revisiting the issue later down the road, though. But those comments, coupled with Trump’s inauguration day executive order on ACA non-enforcement, leave uncertainty around the future of the ACA and any repeal-and-replace efforts. That leaves us with several possibilities to consider:
The vote cancellation means the status quo remains — the ACA is the law of the land, so employers should plan to continue their compliance efforts. Among other things, this means continued compliance with the employer mandate and the associated reporting. Employers should continue those efforts through tracking of hours, including any measurement periods used for variable hour or seasonal workforces. Employers should also plan to comply with other ACA requirements, including PCOR and reinsurance fee payments, covering preventive services at zero cost-sharing, covering dependents to age 26 and observing pre-existing condition exclusion prohibitions.
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Source: HR 360, Inc.
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