Repealing and Replacing the ACA: What Does It Mean For You?

On February 16, 2017, Republican leadership in the U.S. House of Representatives issued a policy brief detailing their intended approach for replacing the Affordable Care Act (ACA). What do you need to know as an employer?

First of all, no action is necessary at this time. The ACA remains intact and in effect, and employers should continue to comply with all its provisions. Many of those provisions are likely to change, however, and it makes sense to be prepared as legislation is advanced to repeal and replace the ACA. Following is an overview:

The policy brief first details the reasons for the proposed replacement, listing the shortcomings of the ACA as follows:

      • Higher premiums for health insurance coverage
      • Low issuer participation rate in the Exchanges
      • A new class of uninsured – those who do not qualify for subsidies and can’t afford coverage; and those with high-premium or high-deductible plans that effectively prohibit access to care
      • An additional $1 trillion in taxes imposed on individuals and businesses

The replacement plan described in the policy brief, called the “Better Way” health care plan, would offer these key elements:

  • Relief from the ACA’s taxes and mandates, including taxes and fees on health insurance providers, medical devices and prescription drug manufacturers, as well as the lowering of the increased expense threshold for deducting medical expenses.
  • Portable, monthly tax credits to be used by individuals to purchase health insurance coverage. The credits would be advanceable (offering assistance at time of purchase) and refundable (available even if an individual has no tax liability)
  • Enhanced Health Savings Accounts with an increased maximum contribution limit, and allowing both spouses to make catch-up contributions to the same HSA.
  • Modernization of Medicaid in an effort to control waste, fraud and abuse at the state level, perceived as a widespread problem. Republicans would repeal the ACA’s Medicaid expansion and establish a budget using a per capita allotment.
  • Utilize state innovation grants, giving flexibility to individual states to use funds as they see fit to reduce patients’ out-of-pocket costs, promote access to preventive services, stabilize the individual and small group markets and promote participation in private health care plans.

Politics and the crafting of legislation being what they are, it remains to be seen how many of these changes will come to fruition. Given the current Republican majorities in Congress, however, it appears a virtual certainty that change will come to the ACA sooner rather than later.  In the meantime, contact Consolidated with questions or to get a health insurance quote.