Wednesday, September 27, 2017

McConnell Pulls Plug on Latest ACA Repeal/Replacment Effort

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McConnell Pulls Plug on Latest ACA Repeal/Replacement Effort

Tuesday afternoon Senate Majority Leader Mitch McConnell announced that they would not vote on Graham-Cassidy, effectively ending the GOP’s hopes of repealing and replacing the Affordable Care Act (ACA) this year. Graham-Cassidy, which was thought to be a non-starter just a couple of months ago, picked up significant steam in the last few weeks as GOP lawmakers faced the reality of their time to repeal and replace the ACA running out. Time was short because the Senate Parliamentarian ruled that the current push to repeal and replace with a simple majority (a process called budget reconciliation) had to end with the current fiscal year on September 30. With this short window of time, Graham and Cassidy pushed hard to get their bill to the floor for a vote and GOP leadership worked with the Congressional Budget Office (CBO) to fast-track a score on the bill (a requirement under budget reconciliation).  

Even with the compressed time frame and energy behind the push, similar to the last attempt in July, the GOP simply couldn’t get it over the hump. This time they were unable to even bring the bill to the floor for a vote. The three Senators that effectively killed this bill were Rand Paul, Susan Collins and John McCain, who put the final nail in the coffin of the previous repeal and replacement attempt in July. All three had different grievances with the bill:  Paul felt that it retained too many taxes and regulations of the ACA, McCain simply wanted the process to look more like “regular order” and Collins has never been comfortable with the various cuts in any of the GOP repeal and replacement attempts.

While the GOP attempt to repeal and replace the ACA seems dead for now, there is already talk of reviving the attempts in the not too distant future. This could be done by providing reconciliation instructions in either the 2018 or 2019 budget resolutions for health care (along with tax reform at some point) that would unlock the budget reconciliation option and the simple majority requirement again. Senators Lindsay Graham and Ron Johnson, who sit on the tax committee, have both already stated that if they were not able to pass a repeal/replace bill before the deadline of September 30, they will not vote for a budget unless it includes reconciliation instructions for healthcare reform and tax reform

We will continue to keep our ear to the ground and keep you posted on all things healthcare reform in the coming months.

Friday, June 23, 2017

Senate Releases Draft Health Care Bill

On Thursday the Senate released a "Discussion Draft" of the Better Care Reconciliation Act (BCRA).  To view the draft you can click here.  At this point the bill is still open for amendments and awaiting a CBO score at the beginning of next week. This means that what is in the existing draft bill will most likely change prior to what is expected to be a vote before the Senate leaves for the July 4th recess next week.

As currently written there are many similarities with the AHCA which was passed last month by the House, but there are some differences as well. (To see our review of the house bill you can click here).

The major differences from the AHCA in this draft bill are:

-No version of an individual mandate (the AHCA would allow insurers to apply a 30% surcharge to premium if an insured had a certain gap in coverage). 

-The pull back of funding for Medicaid expansion is drawn out a little longer, but it appears that the long term funding for Medicaid will be lower than the AHCA proposed.

-The tax credits would be different, capping out at 350% of the poverty level and being tied to a 58% actuarial value plan (the ACA credits were tied to a 70% plan and the AHCA were only age based).  The BCRA does seem to correct the coverage glitch for non-Medicaid expansion states that will allow those at the low end of the poverty level not currently eligible for either Medicaid or a subsidy in the exchange to receive some assistance.

As with the AHCA there are really no adverse impacts to employer-sponsored plans.  The employer mandate would go away which would remove the requirements to offer coverage to all employees averaging more than 30 hours a week. There are enhancements to HSAs which would be favorable to those employers who offer HDHP plans and their employees are eligible for HSAs.  The ACA premium subsidies would stay in place in 2018 and 2019 so many of the existing reporting requirements would most likely stay in place, at least in some capacity.  Moving forward subsidies would continue to be contingent on not having an offer of employer sponsored coverage, so some reporting requirements will most likely remain long term.

Once the bill is finalized and we are confident about the content we will provide some additional updates in the form of blog posts and a webinar.  Stay tuned.

Monday, March 27, 2017

Speaker Ryan Pulls the ACHA Off the Floor Prior to a Vote - The ACA Remains "Law of the Land for the Foreseeable Future"

Around 3:30pm on Friday the House Speaker Paul Ryan came to the conclusion that the GOP didn’t have the votes in the House of Representatives to pass the American Health Care Act and pulled it off the floor prior to a vote.    

This followed a very tumultuous three weeks for the legislation. This included multiple amendments, a CBO score that showed 24 million more people would be uninsured under the law  and what was perceived as rushed committee mark-up meetings and votes to keep the legislation moving forward.

In a prepared statement late Friday, Speaker Ryan acknowledged that the ACA is the “law of the land for the foreseeable future”.  Different lawmakers have different opinions as to how quickly they will pick back up with the effort to repeal and replace the ACA, but most think it will not be an immediate priority. 

President Trump, in press availability shortly after the bill was pulled was asked what’s next on his agenda. He stated “We'll probably be going right now for tax reform, which we could have done earlier, …So now we're going to go for tax reform, which I've always liked.”

That certainly seems to indicate that at least in the short term the ACA will continue to remain in place.  This means employers need to refocus their attention on the ACA and the various requirements that many thought might be going away under the AHCA.

Here are a few things to keep in mind as we move forward with the ACA as the law of the land:

       Medical Device Excise Tax comes back in 2018

       Health Insurer Tax comes back in 2018

       PCORI fees continue through 2019

       Cadillac Tax set to go into effect in 2020

       All existing reporting requirements stand

       All existing notice requirements stand

       Must continue to offer coverage to those averaging more than 30-hours per week or face penalty

       Nondiscrimination for fully insured plans TBD

       Auto-enrollment provision was repealed


Stay tuned as Scott Benefit Services will continue to keep you posted with any changes and updates going on in the world of healthcare reform.   

Tuesday, March 7, 2017

American Health Care Act - Overview

Last night, Republicans in the U.S. House of Representatives released their proposed repeal and replacement bill, called the American Health Care Act.  The proposed legislation is a two-part bill, one coming from the Ways and Means Committee, and the other from the Energy and Commerce Committee.

Most notable for employers, the proposed legislation repeals the employer mandate and there will be no cap on the employer tax exclusion. (A full summary of the major impacts of the bill is included at the end of this post.)

A cap on the tax exclusion was included in a recent draft and in recent weeks we have made significant efforts on behalf of our clients for it to be removed.  We worked on a national level through our C2 Solutions partnership and lobbied in Washington, D.C. through the National Association of Health Underwriters and Council of Insurance Agents and Brokers platforms. We also worked with members of Congress representing the Scott footprint. We engaged in multiple calls with policy advisors, chiefs of staff and directly with the Representatives.  I was in the office of a member of the House leadership yesterday afternoon as the final touches were being put on the bills to be released.  At Scott, we are pleased to see these efforts bear fruit for the benefit of our clients. 

It is important to note that this bill still faces committee review before it is voted on by the House and it must also make its way through the Senate. It is very possible that the proposed legislation we see today will not be the final form.
Our team at Scott will continue to monitor the legislation through the committee markup and House vote process and then into the Senate. We plan to offer a webinar in the coming weeks to cover the details of the legislation more thoroughly. You can subscribe to receive email notifications for our webinars and seminars here.

American Health Care Act Impact Summary

Below is a summary of the major impacts of the bill, by section. Potential impacts to employer-sponsored coverage are in bold. The Ways and Means bill has much more applicability to employers than the Energy and Commerce.

Ways And Means:
Sections 01-02 – Deals with the government recapturing subsidy overpayments and allows premium tax credits to be used to purchase “catastrophic” coverage.
Section 03 – Repeals the ACA premium tax credit/subsidies beginning in 2020
Section 04 – Repeals the ACA Small Business Tax Credits
Section 05 – Repeals the Individual Mandate by reducing the penalties to $0 for all months beginning after December 31, 2015.
Section 06 – Repeals the Employer Mandate by reducing the penalties to $0 for all months beginning after December 31, 2015.
Section 07 – Delays the effective date of the Cadillac Tax until January 1, 2025
Section 08 – Allows OTC medications to be purchased through HSA, FSA, HRA and Archer MSA accounts effective in 2018.
Section 09 – Returns penalty for distribution of HSA or Archer MSA dollars for non-qualified expenses to pre-ACA levels
Section 10 – Eliminates the $2500 (it has been increased to $2600) limit on medical FSA accounts effective in 2018

Section 11 – Repeal of Medical Device Excise Tax
Section 12 – Reinstates employer deduction for offering retiree drug coverage
Section 13 – Repeals the increase threshold for medical expense deduction, returning it to 7.5%
Section 14 – Repeals the 0.9% Medicare Hospital Insurance surtax
Section 15 – Creates new refundable tax credits for individuals who don’t have access to employer or government based insurance
Section 16 – Increases the amount that can be contributed to an HSA to $6,550 for single and $13,100 for family beginning in 2018
Section 17 – Allows both spouses to make HSA catch-up contributions to HSA
Section 18 – Allows certain medical expenses incurred before the HSA was established to be reimbursed if HSA is established with 60 days of HDHP effective date.

Section 01 – Repeal of 10% tanning tax
Section 01 – Repeal of 3.8% investment tax
Section 01 – Remuneration from certain insurers allowing deduction of certain expenses paid to an officer
Section 01 – Repeal of Tax on Pharmaceutical Manufacturers
Section 02 – Repeal of Health Insurance Tax

Energy and Commerce:
Section 101 – Repeals the Prevention and Public Health Fund
Section 102 – Increases funding for the Community Health Center Fund
Section 103 – One-year freeze on Planned Parenthood funding
Sections 111 – 121 – All deal with Medicaid restructuring
Section 131 – Repeals the ACA Cost Sharing subsidy in 2020
Section 132 – Establishes the Patient and State Stability Fund
Section 133 – Establishes a continuous health insurance coverage incentive in the individual and small group market of 30% increased premium if someone has anything more than a 63-day gap in coverage beginning in 2018
Section 134 – Eliminates the “metal tier” (i.e. platinum, gold, silver, bronze) actuarial value requirements
Section 135 – Changes the age variation allowance in premium rates from 3-1 to 5-1.

Friday, January 27, 2017

Reminder: 1095-C Delivery to Employees Delayed Until 3/2/17

This post serves as a reminder to employers that the IRS extended the due date for employers to furnish 1095-C forms to their employees. The date was originally January 31, 2017 and was extended to March 2, 2017.  The due dates for the information returns to be filed to the IRS were not changed.

On November 30, 2016 the IRS released the following notice:

Certain due dates for the 2016 information reporting requirements under IRC sections 6055 and 6056 have been extended.

The due date for furnishing to individuals the 2016 Form 1095-B, Health Coverage, has changed from January 31, 2017, to March 2, 2017.

The due date for filing with the Service the 2016 Form 1094-B, Transmittal of Health Coverage Information Returns, and the 2016 Form 1095-B, Health Coverage, remains unchanged. The due date is February 28, 2017; if filing electronically, the due date is March 31, 2017.

The due date for furnishing to individuals the 2016 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, has changed from January 31, 2017, to March 2, 2017.

The due date for filing with the Service the 2016 Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and the 2016 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, remains unchanged. The due date is February 28, 2017; if filing electronically, the due date is March 31, 2017.

As a result of these extensions, individuals might not receive a Form 1095-B or Form 1095-C by the time they file their 2016 tax returns. Taxpayers do not need to wait to receive Forms 1095-B and 1095-C before filing their returns. For further guidance, please see Notice 2016-70.

Monday, January 23, 2017

Text of Trump's ACA Executive Order

 On Friday shortly after he took the oath of office President Trump signed an executive order designed to "minimize the economic burden of the Patient Protection and Affordable Care Act".

While the President works with congress to attempt to repeal and replace the ACA this executive order allows the HHS and other departments to delay implementing any part of the law that might place a "fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications."

The text of the executive order is below:
Office of the Press Secretary
    For Immediate Release January 20, 2017
    - - - - - - -
    By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
    Section 1. It is the policy of my Administration to seek the prompt repeal of the Patient Protection and Affordable Care Act (Public Law 111-148), as amended (the "Act"). In the meantime, pending such repeal, it is imperative for the executive branch to ensure that the law is being efficiently implemented, take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act, and prepare to afford the States more flexibility and control to create a more free and open healthcare market.
    Sec. 2. To the maximum extent permitted by law, the Secretary of Health and Human Services (Secretary) and the heads of all other executive departments and agencies (agencies) with authorities and responsibilities under the Act shall exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.
    Sec. 3. To the maximum extent permitted by law, the Secretary and the heads of all other executive departments and agencies with authorities and responsibilities under the Act, shall exercise all authority and discretion available to them to provide greater flexibility to States and cooperate with them in implementing healthcare programs.
    Sec. 4. To the maximum extent permitted by law, the head of each department or agency with responsibilities relating to healthcare or health insurance shall encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers.
    Sec. 5. To the extent that carrying out the directives in this order would require revision of regulations issued through notice-and-comment rulemaking, the heads of agencies shall comply with the Administrative Procedure Act and other
    applicable statutes in considering or promulgating such regulatory revisions.
    Sec. 6. (a) Nothing in this order shall be construed to impair or otherwise affect:
    (i) the authority granted by law to an executive department or agency, or the head thereof; or
    (ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
    (b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
    (c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
    January 20, 2017.

    Friday, December 9, 2016

    Repeal...Delay...Replace - The GOP Plan for the Future of the ACA

    It appears as though the growing consensus within the GOP leadership is that they need to insert one additional verb into their plans for dealing with the future of the ACA...Delay.

    After a meeting with Vice President-Elect Mike Pence on Tuesday it seems that the strategy of repeal through budget reconciliation in the first 100 days of President-Elect Trump's presidency is still in their plans. However the replacement isn't going to come as quickly as some had thought, and many in the GOP might have hoped for.

    There is discussion around repealing immediately but delaying the effective date of that repeal anywhere from 6 months to 3 years. 

    In an article written by Senator Mike Lee and Representative Mark Walker in National Review they state it this way:

    ...But deleting Obamacare from federal statute will be only the first step in reforming federal health-care policy. ...We have a responsibility to fix the broken government policies that have crippled our health-care system for decades. This means providing a transition, for however many years, for the market to recover and be able to serve individuals and businesses with more affordable, accessible health coverage. This means implementing the best of the many free-market repair proposals that Republicans have been developing for the past six years. People need options, not heavy-handed government mandates.

    The time period for that "transition" is still being debated.  Senate Majority Whip John Cornyn told Politico We’re talking about a three-year transition now that we actually have a president who’s likely to sign the repeal into the law. People are being, understandably cautious, to make sure nobody’s dropped through the cracks,”
    There is some resistance within the GOP to the prospect of delaying the effective date of the repeal. The House Freedom Caucus and most notably Senator John McCain have expressed opposition to any path forward that doesn't repeal and replace the law at the same time.  
    What does seem clear at this point is that some major parts of the ACA will be repealed in the next few months via the budget reconciliation process. The effective date of those delays and how they will be replaced remain to be seen.
    This leaves employers in the dark about exactly how their day to day requirements around the ACA will be impacted in 2017 and beyond. The Employer Mandate will almost certainly be part of the requirements that are repealed but a delay may mean it is business as usual for 2017 (and potentially beyond) from an administrative reporting and tracking perspective. A delay would most likely also mean all of the coverage requirements and ALE rules would stay in place.
    This is certainly something that employers will watch closely in the coming weeks and months.