On Thursday morning, members of the Senate revealed their version of the American Health Care Act (AHCA), titled the Better Care Reconciliation Act of 2017 (BCRA), to repeal and replace the Affordable Care Act (ACA). Like the AHCA, the majority of the BCRA deals with individual markets and Medicare. Of particular note, the BCRA places the eligibility for tax credits to purchase individual coverage back on income, instead of on age as the AHCA does.
Much like the version the House passed last month, there are provisions that will affect employers if the bill becomes law. In particular, just as in the AHCA, the BCRA would reduce the penalties imposed under the Individual and Employer Mandates to zero beginning in 2016, effectively repealing both (although they would technically still exist, along with their reporting requirements).
Here are some details of the bill that employers should take note of:
- The Employer Mandate penalty would be repealed retroactively to December 31, 2015, though its reporting requirements would remain in place.
- The "Cadillac" tax implementation would be pushed from 2020 to 2026.
- Insurers would be able to set up “Small Business Risk Sharing Pools.”
- Many of the ACA’s insurance reforms would be left in place.
- The actuarial value requirements on plans would be removed, and age-banded rates would be expanded from the current three-to-one ratio to a five-to-one ratio (or higher if a state determines).
- HSA contribution limits would be capped at the same amount as the annual out-of-pocket limit, and HSA expenses incurred up to 60 days prior to beginning HSA coverage would be covered. Also, both spouses would be eligible to contribute catch-up contributions to the same HSA account.
- The annual limit on contributions to FSAs would be removed, as would the prohibition on using FSA or HSA dollars on over-the-counter medications.
Again, the bulk of the legislation deals directly with the individual mandate/markets, tax credits for purchasing coverage and Medicaid reform. Additionally, some of the provisions in the legislation may be modified before the Senate actually votes on this bill, though GOP members have stated that they will hold no hearings prior to voting. A Congressional Budget Office “score” on the bill should be made available early next week as well.