The eagerly awaited Trump American Healthcare Act bill has been unveiled to repeal and replace the current Affordable Care Act. This will continue to unfold over the next few months, as this is a bill and not a law yet. And although much of it impacts consumers who are not covered by an employer plan there are a number of key provisions that will impact employers who provide healthcare benefits to employees. It is critical to scrutinize all of the individual bill pieces as they unfold over the coming months to help you plan for upcoming employee benefit package creation and rollout. Here are the main items that relate to employer plans you need to watch.
1. Repeal of the employer mandate. A key part of the Affordable Care Act, the current law requires that employers with at least 50 employees provide health insurance to their workers. This will be accomplished initially by a repeal of the tax penalties that are related to the mandate. The repeal of penalties is retroactive to the 2016 tax year.
2. Delay of the Cadillac tax. The current plan delays this tax, which calls for a 40% excise tax that would be levied on generous employer health insurance plans. The Affordable Care Plan Cadillac Tax was slated to go into effect in 2018, taxing employers on premiums that exceed $10,200 for individual and $27,500 for family plans. The Republican plan delays this tax until 2025.
3. Create more generous Healthcare Savings Accounts. The Republican bill includes provisions to raise the annual contribution limits to equal the maximum sum of the deductible and out-of-pocket expenses one would pay in a high-deductive insurance plan. This would be at least $6,550 for an individual and $13,100 for a family next year.
4. Flexible Spending Account caps lifted. Under the Affordable Care Act, FSA’s had a limit of $2,600. Under the GOP bill, this limit will go away entirely at the end of this year.
5. Repeal of medical device tax. This would eliminate the 2.3% excise tax on certain medical devices sold. This in theory is built into premium and plan costs.
6. Reporting requirements. The exclusion of the mandate will lessen reporting requirements over time but it is not explicitly stated that ACA annual employer 1094/1095 reporting under section 6056 of the code is repealed. Instead there is a requirement that employers indicate on W2s the months of coverage each employee was eligible for coverage. The current bill does not state at this time that employer reporting is eliminated.
7. Essential health benefits remain. The bill keeps the ten categories of services plans must cover. These include inpatient and outpatient hospital care, prescription drug coverage, pregnancy and childbirth, mental health and emergency services, rehab, lab, preventative and wellness services.
For those who like the details, here is the current document put out by the house GOP: https://housegop.leadpages.co/healthcare/