A Narrow Vote Passed, But the Effect Still Unknown

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By Jenny Riley and Bill Winter, Hodges-Mace

The American Health Care Act (AHCA) just passed in the House of Representatives with a narrow vote of 217 to 213.

The AHCA was introduced for a vote in the House on March 24th, but was ultimately pulled from consideration before a vote took place. After much debate, the bill was reintroduced yesterday with two amendments: the MacArthur amendment and the Upton amendment. The MacArthur amendment introduced a system for states to apply for waivers to some of the requirements under the ACA. The Upton amendment allocated funds to states that receive those waivers to use towards their own programs.

The next step for the AHCA will take place in the Senate. The Senate is anticipated to make several changes to the House bill before a potential vote is scheduled. In addition, many question whether provisions of the House bill will survive the Senate reconciliation process. Ultimately, we all must wait and see how the process shakes out in the Senate.

Recent media coverage on the House bill has been focused largely on the impact to the individual insurance market. As an employer, you may be asking what does this mean to me? Section 206 of the AHCA amends the employer mandate by changing the $2,000 & $3,000 employer penalties to $0 for months beginning after December 31, 2015. In addition, Section 207 of the AHCA further delays implementation of the excise tax on high cost employer-sponsored coverage (aka: the “Cadillac Tax”). However, the requirement to offer compliant coverage to all full-time employees still exists in the House bill. As a result, the potentially favorable reduction in taxes and penalties is offset by the continuing obligation to offer coverage and, potentially, to provide ACA-style reporting.

The precise impact on employer reporting continues to remain unclear. The requirement imposed on employers to offer coverage to full-time employees, and to measure and report part-time or full-time status, appears to remain intact. While there will no longer be a penalty to the employer for failure to offer compliant coverage, the House bill retains many reporting requirements (presumably because employers receiving employer-provided coverage are not entitled to refundable tax credits). As with any new legislation, only the final law and its implementing regulations will give employers the certainty needed for effective planning.

We will continue to closely monitor the progress of the AHCA as it moves through Congress.