By the narrowest of margins, House Republicans approved an amended version of the American Health Care Act (AHCA) on May 4 (the bill needed 216 votes to pass; it won 217). Although the measure now faces long odds – if not a major overhaul – to get through the Senate, employers and invested HR/benefits professionals should know six things about AHCA as it gets one step closer to the president’s desk.
- Major mandates are gone. Similar to the original version of AHCA, the new version also eliminates the employer mandate and the individual mandate by zeroing out the penalties for not offering/not maintaining health coverage.
- Employer reporting remains. The new AHCA still requires employers to report the value of health benefits on employees’ W-2 forms.
- The Cadillac tax remains, too. However, similar to the original version of AHCA, the tax remains delayed until 2025.
- Most other ACA taxes, however, are eliminated. AHCA 2.0 rolls back 14 of the 21 taxes used to fund ACA, including HSA improper withdrawal penalties and the 10 percent tax on indoor tanning.
- States can waive cost protections for people with preexisting conditions. Among the biggest changes to AHCA in the second go-round is that states can apply for federal waivers to opt out of the ACA rule that keeps insurers from charging more to people with preexisting health conditions. The new bill adds an extra $8 billion to fund high-risk pools to help pay the higher premium costs for people in such states. However, early analysis indicates these funds won’t be enough to mitigate cost increases for people with preexisting conditions.
- States also can opt out of requiring ACA’s essential health benefits (EHBs). States also can apply for waivers that would allow insurers to sell plans without coverage for EHBs – which include maternity care, mental health care, emergency services, lab tests, and prescription drugs. Waiving EHB requirements would help lower premium costs, but out-of-pocket costs may skyrocket for people covered by those lower-cost plans who need those services.
Next up, the bill progresses to the Senate, where Republicans have a slim majority. Stay tuned to the Businessolver Blog for updates on AHCA as it moves through the upper chamber.