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Budget reconciliation to repeal tax provisions of the ACA, medical liability reform, employer-sponsored wellness programs.
As previously reported, Congress passed the fiscal 2017 budget resolution (S.Con.Res.3) on January 13. This resolution instructs committees of jurisdiction (House Ways and Means; House Energy and Commerce; Senate Finance; and Senate Health, Education, Labor and Pensions) to begin drafting budget and tax reconciliation legislation, which will include specific legislative provisions to repeal the tax provisions of the Affordable Care Act (ACA). The budget resolution set a drafting deadline of January 27.
While the drafting deadline has slipped for more than a month, on February 24, a discussion draft of the House budget reconciliation bill was leaked to the press. The draft bill, which is likely to be altered before formal introduction possibly as early as next week, includes provisions of interest to the HR profession which will impact employer-sponsored health plans. Specifically, the draft bill includes the repeal of the individual and employer mandate penalties. It would also repeal the taxes imposed by the ACA, including the excise "Cadillac tax" on high-value plans (the effective date is applicable to taxable years after December 31, 2019). In addition, the draft includes a proposal to limit the employer-sponsored insurance tax exclusion. The bill calls for adding to the taxable income of employees, beginning after 2019, the cost of employer group coverage that exceeds the "annual limitation." Employer contributions to HSAs, medical savings accounts, long-term care, and dental or vision coverage would not be subject to the tax; neither would coverage for law-enforcement personnel, firefighters or emergency responders.
This draft bill does not repeal the ACA as a whole, but rather repeals particular sections of the ACA such as its tax provisions, mandates, Medicaid expansion and subsidies. Furthermore, the bill does not repeal most of the ACA's insurance reforms, such as the requirements that health plans cover pre-existing conditions; cover adult children up to age 26; not discriminate on the basis of race, nationality, disability or sex; cap out-of-pocket expenditures; and not impose lifetime or annual limits.
A formal bill is expected to be introduced in the House of Representatives within the next few days. Thereafter, the bill will need to be considered by committees of jurisdiction and then ultimately the House of Representatives as a whole. As lawmakers consider ACA repeal and replacement efforts, SHRM will continue to advocate for congressional reforms that will strengthen and improve the employer-based health care system, including full repeal of the ACA excise tax and the preservation of the tax treatment of employer-sponsored health plans.
Meanwhile, other targeted efforts to address medical liability reform and preserve employer-sponsored wellness programs are underway in the House of Representatives.
On February 28, the House Judiciary Committee approved H.R. 1215, the Protecting Access to Care Act, a medical liability bill. The proposal limits noneconomic damages to $250,000, among other provisions, and will be applicable to malpractice suits in which the plaintiff received health care provided under Medicare, Medicaid or employer-sponsored plans. SHRM has previously encouraged Congress to enact medical liability reform as a way to reduce health care costs and preserve Americans' access to medical care. As such, SHRM supports the Protecting Access to Care Act. The proposal would strike a balance between protecting patients harmed by medical malpractice and preventing unnecessary and costly litigation that contributes to rising health care costs.
On March 1, the House Education and the Workforce Committee hosted a hearing entitled "Legislative Proposals to Improve Health Care Coverage and Provide Lower Costs for Families." The hearing is part of the committee's broader efforts to repeal the ACA and replace it with patient-centered solutions. Members discussed the Small Business Health Fairness Act (H.R. 1101), a proposal that would empower small businesses to join together through association health plans to provide their employees greater access to affordable health care.
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