Now that House leaders have withdrawn the GOP's American Health Care Act from formal consideration—at least for the time being—the Affordable Care Act (ACA) will stay in effect and attention is turning to federal agencies for any regulatory relief they can give employers under the existing law. In the meantime, employers must continue to comply with the ACA's many coverage obligations and administrative requirements.
"Obamacare will remain the law of the land," House Speaker Paul Ryan, R-Wis., said during a press conference shortly after the bill was pulled last Friday. "We're going to be living with Obamacare for the foreseeable future."
However, there were indications this week that Republican lawmakers were continuing to work behind the scenes to see if a compromise on the American Health Care Act—the GOP's repeal and replacement bill—might yet be reached by the party's conservatives and moderates. How much to read into these efforts remained unclear.
President Donald Trump said on March 28 that he believed a deal could still be reached to pass the American Health Care Act, and indeed anything could be possible given the high state of political unpredictability in Washington. But one thing is clear: unless and until the current law is changed, employers that don't abide by it will be at risk.
If GOP efforts to revive the American Health Care Act fail, the ACA and its implementing rules could still see modest changes through targeted legislative actions and regulatory adjustments. However, employers subject to the ACA—those with 50 or more full-time employees or equivalents, in particular—should continue complying with the ACA's wide-ranging coverage mandates that require applicable large employers to offer minimum essential coverage that is affordable and provides minimum value to full-time employees, and all related employee tracking and reporting requirements, benefit attorneys advised.
"Congress is still likely to consider targeted legislative proposals to make modifications to the ACA," said Chatrane Birbal, a senior advisor for government relations at the Society for Human Resource Management (SHRM).
"As Congress and the regulatory agencies take action on ACA modifications, SHRM will continue to advocate in support of the employer-sponsored system," Birbal noted. "In particular, we will continue to support full repeal of the ACA excise tax on high-value employer-sponsored plans, which has bipartisan support in Congress, and we will advocate in support of easing the administrative burden of the ACA reporting requirements on employers, among other priorities."
But while the agencies can use the rule-making process to mitigate some of the statute's requirements, "the bottom line is that congressional action is required to outright repeal the employer mandate penalties" and related reporting requirements, Birbal said.
Most likely, "if the GOP addresses the ACA at all over the coming 20 months, it will address it in smaller bites, with bipartisan bills to repair aspects of the individual and small-group health insurance markets that have suffered in the wake of several ACA-imposed mandates," predicted Ed Fensholt, senior vice president and director of compliance services at Lockton, a benefits brokerage and consultancy in Kansas City, Mo., and Scott Behrens, a benefits compliance attorney at Lockton, in an alert from the firm.
"One open question is whether and how the federal agencies in charge of implementing the ACA will take action at the administrative level to effectuate changes in the law," said Garrett Fenton, an attorney with Miller & Chevalier in Washington, D.C., in an e-mail to SHRM Online.
Many of the details of ACA implementation were delegated to the agencies, particularly the departments of Health and Human Services (HHS), Labor and the Treasury, "meaning those same agencies still wield a great deal of ability to alter the trajectory of the law, and the insurance and health care markets as a whole," Fenton noted.
"In the near-term, there will be intense focus on HHS Secretary [Tom] Price to provide regulatory relief to the maximum extent permitted under the ACA. This is consistent with the executive order signed by President Trump immediately after his inauguration," stated a compliance alert by ABD Insurance and Financial Services. Of concern to employers is "whether that regulatory effort will be sufficiently focused on issues facing employer-sponsored group health plans," the firm noted. "HHS and Secretary Price are typically more focused on issues facing the individual market, providers and insurance carriers."
[SHRM members-only toolkit: Complying with and Leveraging the Affordable Care Act]
Affordability Issues Remain
"In the next few months, it's not likely a new repeal and replace bill will find its way through Congress," and so "regulatory activity will be the focus," wrote independent policy analyst Paul Keckley, managing editor of The Keckley Report, a health care industry newsletter, after the GOP bill was withdrawn. In the meantime, the health care system still needs improvement and "affordability is the issue one," he stated, pointing out that deductibles for those insured by their employers "increased 12 percent last year alone to $1,478/employee. Out of pocket costs for services not covered increased even higher, with medical debt piling up on credit cards."
Something else to keep an eye on, Keckley noted, is that "tax reformers, with an eye toward the 2018 budget due in May, will revisit tax exemptions" as part of deficit reduction—possibly including the employer tax deduction for health care benefits.
As to what sorts of regulatory relief might be expected, "That's the $64,000 question at this point," Fenton said. "HHS has already published a proposed 'market stabilization' rule that would make a number of regulatory modifications, particularly for individual and small-group coverage," such as tweaking the rules surrounding actuarial value requirements for some plans, he pointed out.
"One big-ticket item that could be on the regulatory agenda is revisiting the 10 essential health benefits that individual and small-group plans are required to cover," such as maternity/newborn care, substance use disorder services and pediatric services, he noted. The definition of essential health benefits also affects large group plans, because all employer-provided plans—including those that are self-funded—are prohibited from subjecting the coverage of essential health benefits to annual and lifetime dollar limits.
"We may see HHS take regulatory steps to attempt to loosen those essential health benefits requirements, albeit within the parameters of the 10 categories of 'essential' benefits prescribed in the statute," Fenton said.
The agencies also are likely to revise some of the rules pertaining to preventive care services that all plans and insurers are required to cover without cost-sharing, he noted, "particularly in connection with contraceptive coverage and other more controversial benefits."
But "if the past few months have taught us anything, it is very difficult to predict how this will shake out," Fenton said.
Anticipated Fixes Fall Off the Table
The now-withdrawn American Health Care Act (AHCA) would have provided relief for employer-provided health plans in a number of ways. For instance:
[SHRM members-only how-to guide: How to Use the Look-Back Measurement Method to Determine Full-Time Status Under the Affordable Care Act]
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