SHRM: 'Repeal and Replace' Must Strengthen Employer-Based Health Care

Flexibility and certainty for employers sought as Congress takes first steps toward Affordable Care Act repeal and replacement

Stephen Miller, CEBS By Stephen Miller, CEBS January 17, 2017
SHRM: Repeal and Replace Must Strengthen Employer-Based Health Care

As the Republican-majority in Congress takes the first step toward repeal and replacement of the Affordable Care Act (ACA), the Society for Human Resource Management (SHRM) is urging Congress to maintain the effectiveness of the employer-based health care system.

The Republican majority in the Senate passed a fiscal year 2017 budget resolution concerning the ACA (S.Con.Res.3) by a 51-48 vote along party lines on Jan. 12, and the House did the same the next day by a 227-198 vote.

The resolution, introduced by Senate Republicans on Jan. 3, is considered the first step toward introducing legislation to repeal and replace the health care reform law. It sets up a reserve fund for future health care legislation under an upcoming ACA replacement bill, based on savings to be derived from the repeal of the health care reform law.

Now that Congress has adopted the budget resolution, committees of jurisdiction will begin drafting budget and tax reconciliation legislation, which will include specific legislative provisions to repeal the tax provisions of the ACA. While measures passed through the budget reconciliation process must be budget-neutral, the resolution gives special protection to bills repealing or "reforming" the ACA, even if such bills cause a temporary increase in spending.

House Speaker Paul Ryan, R-Wis., said in a statement, "This resolution sets the stage for repeal followed by a stable transition to a better health care system. … Today we begin to deliver on our promise to the American people."

[SHRM members-only HR Q&A: What are the consequences under the ACA if an employer offers no health coverage?]

Flexibility Sought

Following Senate passage of the budget resolution on Jan. 12, SHRM sent a letter to members of the House. In that letter, Michael P. Aitken, SHRM's vice president of government affairs, urged representatives, as they consider reconciliation legislation, to:

  • Maintain the flexibility and certainty afforded employers under the Employee Retirement Income Security Act (ERISA), which is essential to the success of the employer-based system.

  • Repeal the 40 percent excise tax ("Cadillac tax") on high-value, employer-sponsored health care benefits.

  • Eliminate coverage requirements on employer-sponsored plans to ensure employers have the flexibility to design benefit plans that meet the unique needs of varying workforces.

  • Allow employers to adopt innovative strategies to improve health benefit offerings to lower overall U.S. health care costs.

"SHRM looks forward to working with Congress to enact responsible and effective health care reforms as outlined above," Aitken wrote.

SHRM's HR Public Policy Issues update has more information about the budget resolution and reconciliation process and congressional action on health care. 

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