Comp & Benefits Alert | May.11.2017
We promised to keep you up to date on the GOP majority's promise to repeal and replace the Affordable Care Act (the "ACA"). After reaching agreement on several amendments to the original House bill (described in our previous alert), the House of Representatives passed the American Health Care Act, (the "AHCA") a budget reconciliation bill to repeal and replace the ACA. The first draft of the AHCA, released by House Republicans on March 6th was withdrawn by Speaker Ryan on March 24th due to opposition from the Freedom Caucus, among others. Several significant changes were made to the original bill and it was passed by a narrow margin on May 4th; 217-213.
The fate of the AHCA now rests with the Senate. The media has been reporting that the Senate is likely to draft its own bill as opposed to amending the AHCA. The Senate has a smaller Republican majority and can only afford to lose a few votes to ensure passage but many Republican Senators have expressed disapproval of the AHCA. Senator Collins of Maine has offered an alternative, called the Patient Freedom Act. The Senate Majority leader has formed a "working group." The major controversy of the moment involves the effects of the Medicaid expansion repeal. Alas, the bumpy ride continues.
No one can predict whether the Senate will act before the summer recess or even year-end and if it does act, whether it can craft a bill that will pass both Houses. We don't know which parts of the AHCA, if any, will remain or whether any parts of the AHCA will be effective for the 2018 plan year. Amidst all this uncertainty, employers are designing and preparing their health plans for 2018 open enrollment and health insurers are setting or have already set their rates for next year.
Subject to this uncertainty, below is a brief description of the main provisions in the AHCA as passed by the House of Representatives that impact employer-sponsored health plans:
The AHCA also eliminated several taxes and fees imposed by the ACA. We are likely to see a report from the CBO on the costs of the AHCA early in the week of May 22nd, which may well inform the Senate's deliberation. Some Senators have told the media that the AHCA or its replacement will not receive a quick vote in the Senate.
Stay tuned for Part III as major developments and changes unfold.