Negotiations over the Senate’s bipartisan healthcare bill this week turned to reports of new White House demands for provisions that could ease employer-sponsored plan restrictions and boost healthcare options.
But despite the potential upside for employers, the one seemingly unanimous and top priority for companies and benefit providers – besides elimination of health insurance taxes – is market stability.
“You never know what tomorrow is going to bring,” says Julie Stone, leader of the health and benefits practice at Willis Towers Watson. “There is just so much churn. The biggest issue is there are too many unsolved issues.”
Indeed, uncertainty has (again) been the rule of the day since President Donald Trump in early October issued an executive order cutting off subsidies to insurance companies to help cover costs of low-income, individual policy holders.
Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) responded with a compromise supported by a majority of the Senate to continue the payments while also giving states new flexibility on how their Affordable Care Act markets are run.
Trump initially indicated support, but then backed away. According to The Wall Street Journal, he responded this week with a one-pager outlining administration demands for more concessions, including elimination of penalties on individuals who don’t carry health coverage as well as those imposed on large employers who fail to provide health plans for their workers.
The administration also has reportedly demanded an expansion of the use of health savings accounts and so-called association health plans that can be exempt from ACA requirements, as well as increased access by individuals to short-term plans that offer fewer benefits.
Katy Spangler, senior vice president for health policy at the American Benefits Council, an employer advocacy group, says she hasn’t seen that document, but she welcomes anything that would bring flexibility for employers.
“Just given the choice between less flexibility and more, we are always going to want more, she says.
Relief for employers
The Council, Spangler says, strongly supports eliminating contribution and other limits on the tax-friendly HSAs, which are currently coupled with qualifying high-deductible plans. Enabling more employers to offer the 401(k)-style tax savings accounts that can be used for qualifying medical expenses would give companies “one more benefit they can offer their employees.”
Additionally, she says, while an elimination of the requirement that large companies provide health insurance would be welcome by most companies, the relief would be more about the ending the morass of bureaucracy that accompanies the rules than any desire to do away with benefits.
“Most large employers were providing it before ACA and will continue to regardless of whether there is an employer mandate,” she says. “The employer mandate created a lot of hoops that companies have to jump through…. So we would definitely welcome relief from the mandate as well as the reporting requirements.”
America’s Health Insurance Plans, a health insurance company trade association, has taken no position on the employer mandate, according to AHIP. Although not currently included in either the White House or Senate proposal, a top priority for AHIP and others is elimination of the so-called “Cadillac tax,” a 40% surcharge scheduled to take effect in 2020 on the most expensive employer-sponsored health insurance plans, as well as the current across-the-board 3% tax on policies.
And while it was unclear exactly what changes were being proposed for association plans, a recent brief by AHIP said that any exemptions for the plans that are sold by professional associations and sometimes used by small businesses could lead to instability, higher premiums and decreased coverage in the small group market.
And right now, ensuring stability in the marketplace is a key for employers.
“It may not be super intuitive, but employers want to make sure there is a stable individual market,” Spangler says. “If the individual market is unstable, it creates a ripple effect” that will shift the costs for uncompensated care to employers and other stable health insurance customers.
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