The American Health Care Act: What Could Happen

We have been keeping a close eye on the deliberations in Washington as they make another attempt at replacing the Affordable Care Act. This week, the U.S. House of Representatives has passed the American Health Care Act. The bill will now be sent to the U.S. Senate. Until this legislation is passed by the U.S. Senate and signed into law by President Trump, all existing ACA requirements remain in effect, including penalties for noncompliance.

Notable Provisions of the American Health Care Act
If signed into law, the American Health Care Act would, among other changes, make the following revisions to key features of the ACA over the next three years:

• “Pay or Play”: Penalties for noncompliance with the “pay or play” coverage requirement (which mandates, in general, that employers with 50 or more full-time employees [including full-time equivalent employees] must offer affordable, minimum value coverage to their full-time employees, or pay a penalty tax) are zeroed out. However, the Form 1094 & 1095 reporting requirements are unchanged by the bill.
• Individual Mandate: Penalties for noncompliance with the individual mandate are zeroed out, effectively repealing the mandate. In its place, the bill requires issuers in the individual or small group markets to impose a 30% penalty on the health insurance premiums of individuals who do not maintain continuous health insurance coverage.
• HSA Contribution Limits: Limits on contributions to health savings accounts (HSAs) are increased to equal the inflation-adjusted annual out-of-pocket expenses limitation imposed on high deductible health plans (currently $6,550 (self-only coverage)/$13,100 (family coverage)).
• Health FSA Contribution Limits: Limits on contributions to health flexible spending arrangements (health FSAs) are eliminated.
• Tax Credits for Individual Coverage: Replaces the ACA’s premium tax credits for individual market coverage with advanceable, refundable tax credits adjusted for both age and income.
• Market Reforms: Permits states to seek waivers from the ACA’s essential health benefits and age and health status community rating requirements.
• Medicaid: Allows states to elect to receive federal Medicaid funding via a block grant or per capita allotment, and alters the ACA’s Medicaid expansion.

We will continue to stay on top of any developments and keep you in the loop. As always, please contact us with questions, or to learn more about NARFA. Since 1929, businesses in the automotive, roads, fuel, and related industries have trusted NARFA with their employee benefits and many more association programs.

Now, more than ever, the value of having a strategic partner is more important to the health of your business, and our track record speaks for itself with a 99% member retention rate.