Daily Archives: May 16, 2017

House Votes to Repeal and Replace the ACA – What Does it Really Mean?

healthcare

On May 5, the House of Representatives narrowly approved the American Health Care Act (AHCA). The bill was hastily modified after the initial version from March was doomed to fail. The current Administration has been under enormous pressure to make progress on one of its biggest campaign promises. What began as repeal Obamacare during the campaign, morphed into repeal and replace post-inauguration and is now a huge unknown.

Some of the relevant healthcare provisions of the new bill include:

  • Repeal of the employer shared-responsibility penalties
  • Greater state control over health plan requirements
  • Further implementation delays of the Cadillac Tax until January 1, 2026
  • Increased limits on HSA contributions: $3,400 to $6,500 for individuals; $6,550 to $13,100 for families
  • Elimination of the health flexible savings account contribution limit
  • Authority given to states to allow insurers to charge higher premiums for individuals with pre-existing conditions
  • Medicaid revisions back to the pre-Affordable Care Act (ACA) framework

Many of the provisions are nothing more than reverting to pre-ACA standards. The bill’s next stop is the Senate where it will likely face significant opposition amidst a slow and methodical review process.

Virtually all involved with healthcare agree that various parts of the ACA need revisions, but it is difficult at this point to envision a complete dismantling of the ACA. Employees and employers should continue to monitor legislative developments, while trying to avoid feeling every bump along the way. It has become increasingly difficult, if not impossible, to evaluate what is really going to happen and the eventual impact. Healthcare is a profoundly complicated issue that has been muddied by special interest groups, excessive political rhetoric, and sensationalized media coverage.

Individuals that anticipate consistent employer coverage should avoid some of the impact from future healthcare changes. However, individuals with spotty employer-based coverage could be greatly impacted by the eventual outcome, especially those with pre-existing conditions. Large employers should expect to fare better than smaller ones, with everyone receiving various forms of reporting and penalty relief.

The current healthcare structure in the United States is broken on many fronts, not just health insurance. It’s a complicated and dynamic issue that has certain tentacles, which are politically unappealing. Individuals and employers alike must accept that the next several years are fraught with uncertainty while continued focus on wellness and flexibility are key.

If you should have any questions, please contact Aronson Compensation and Benefits Practice Director Mark Flanagan at 301.231.6257.

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