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Affordable Care Act Update

As published in the April Issue of the PELRAS Newsletter


Published on: Fri 7th Apr, 2017 By: David E Mitchell


        The Affordable Care Act recently survived another challenge, but changes will continue to be considered at the federal level.  A vote was scheduled for March 23, 2017 on a potential replacement bill that would have repealed and replaced significant parts of the Affordable Care Act.  That vote was ultimately canceled due to differences of opinion regarding the contents of the bill that left it without enough votes to pass in the House of Representatives.
        For now there are no immediate plans to bring an ACA repeal bill to a vote in Congress, but it is likely there will be in the future.  The proposed replacement bill, entitled the American Health Care Act (“ACHA”), would have repealed parts of the Affordable Care Act, but left some other parts in place.  In particular, the ACHA would have retained the ACA’s Cadillac Tax, but would have delayed it from 2020 to 2025.  The ACHA also would have retained the Affordable Care Act Marketplaces or Exchanges, the requirement that children be permitted to stay on their parent’s health insurance up to age 26, the ban against basing eligibility on health status or pre-existing conditions, and the prohibition against lifetime and annual limits on coverage.  The ACHA would have eliminated the employer mandate, which imposes potential “Play or Pay” penalties on employers with 50 or more full-time employees/equivalents who do not offer affordable coverage to employees who average 30 or more hours of service per week.  The ACHA also would have repealed the individual mandate, which penalizes individuals who do not have health insurance. 
        Although it is possible that some provisions of the Affordable Care Act will be repealed in the future or that the regulations that are currently in place will be rescinded or revised, for now it is critical that employers continue to comply with the provisions of the Affordable Care Act.  Employers should continue to monitor the hours of employees and be sure that employees who average 30 or more hours of service per week are offered the appropriate coverage.  In addition, if an employer receives a Health Insurance Marketplace Notice from the Department of Health and Human Services, it should review that notice and promptly evaluate whether there are grounds for an appeal, due to the fact that such notices are the first formal step in imposing a costly potential ACA penalty.  
        Whether the Affordable Care Act is replaced or not, it is a near certainty that health insurance costs will continue to rise.  Regardless of what happens with the Affordable Care Act, employers should continue to seek increased healthcare contributions from their employees, ideally based on a percentage of the premium or the percentage of the premium increase, and should also seek increased flexibility to make plan changes. Even if the Affordable Care Act is repealed, there likely will be a transitional period of a year or more during which ACA requirements will stay in place.  It is critical to continue making sure that your organization complies with the Affordable Care Act until and unless legislation repealing or replacing it takes effect.