Senate Fails to Move Health Care Forward

Chatrane Birbal By Chatrane Birbal September 29, 2017
Senate Fails to Move Health Care Forward

Earlier this week, Majority Leader Mitch McConnell (R-KY) announced that the Senate will not vote on the latest health care bill known as the Graham-Cassidy-Heller-Johnson (GCHJ) proposal, ending immediate efforts to repeal and replace the Affordable Care Act (ACA). The GCHJ proposal was introduced as a substitute amendment to the House-passed  American Health Care Act that was created under the budget reconciliation process and therefore, amends only the tax provisions of the ACA. . The GCHJ did include a provision reducing the employer mandate penalty to zero.

Republican Senators John McCain (AZ), Susan Collins (ME) and Rand Paul (KY) announced that if the bill was brought to the Senate floor they would not support it. In addition, Senator Ted Cruz (R-TX), said he did not support the measure as written, and several other senators had not taken a firm position on the plan. Senate leadership needed to retain the support of at least 50 Republicans to pass the bill, with Vice President Mike Pence breaking the tie under reconciliation rules. While the Senate may return to health care reform after addressing tax reform, the expedited budget reconciliation process used in the health care reform effort expires on September 30 with the end of the federal fiscal year and therefore reform supports will need to garner 60 votes to overcome a filibuster from Senate Democrats to pass any repeal and replace measure.

So, what's next for health care? It is likely that the House and Senate will hold public hearings and make bipartisan modifications to the ACA. More immediately, bipartisan talks to stabilize the marketplace are likely to resume. While the administration made cost-sharing reduction payments for the month of September, the future of these payments remains unknown.

Congress may also focus on more targeted modifications to address affordability, coverage and quality of care, thereby delivering on one of the Republican Party's key campaign promises.

It is also possible that future legislative proposals may contain some provisions included in the House and Senate repeal and replace bills. For example, earlier in the debate, the Senate adopted an amendment offered by Senator Dean Heller (R-NV) to repeal the "Cadillac tax" on high-value, employer-sponsored health insurance. Under the ACA, beginning in 2020 a 40 percent excise tax will be imposed on high-cost employer-sponsored health coverage benefits exceeding certain thresholds ($10,200 for individual coverage and $27,500 for family coverage). SHRM has long supported the repeal of the Cadillac tax and advocates in support of bipartisan, bicameral legislative proposals that have been introduced to repeal the tax.

In addition, other SHRM-supported stand-alone legislative proposals will be re-introduced. Earlier this month Representatives Jackie Walorski (R-IN) and Daniel Lipinski (D-IL) introduced H.R. 3798, the Save American Workers Act, and Senators Susan Collins (R-ME) and Joe Donnelly (D-IN) introduced S. 1782, the Forty Hours Is Full-Time Act. These bipartisan proposals would amend the Internal Revenue Code to modify the definition of a full-time employee from 30 hours to 40 hours of service per week for purposes of the employer mandate, which requires employers to provide health care coverage for their employees under the ACA. The bill would not require employers to change their definition of full-time. Instead, the bill would provide employers the flexibility to determine what constitutes "full-time" (between 30 to 40 hours) for their business. Another proposal likely to be reintroduced is a bill to ease the compliance reporting requirements for employers offering health insurance coverage to their employees.

In addition, now that repeal and replace efforts are currently over, regulatory guidance from the departments of Labor, Health and Human Services, the Treasury, and the Internal Revenue Service IRS)—is anticipated. In particular, actions in response to President Trump's January 20 executive order, Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal, directs federal agencies to minimize regulatory burdens of the ACA. These regulatory burdens may include employer reporting requirements and employer pay-or-play penalties.

As Congress and the regulatory agencies take action on ACA reforms, SHRM will continue to advocate in support of the employer-sponsored system. 



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