Employer groups targeting a number of healthcare reforms in Congress
Employer associations are regrouping after Congress failed to repeal and replace major elements of the Affordable Care Act this summer, and they have a number of priorities on their agenda.
Congress is now back in session following the August recess, and there are several deadlines that will bring attention back on the issue in the near term. The Senate has until the end of the month to pass an ACA replacement bill using a process known as budget reconciliation, which requires just 50 votes. Lawmakers also are working to shore up the individual market before Sept. 27, when insurers must finalize the plans they will sell on the exchanges for 2018. Funding for the Children’s Health Insurance Program also expires on Sept. 30.
Beyond that time frame, employer groups are likely to continue to press for a broad range of tweaks that could potentially be taken up as standalone bills or included in packages of must-pass legislation later this year.
Here are some of the biggest legislative priorities for employer associations this fall and what the efforts could mean for employer-sponsored care.
Roll back ACA taxes: Supporters of employer-sponsored healthcare are expected to continue their fight to repeal or delay several ACA taxes this coming fall.
The Cadillac tax, which imposes a 40% excise tax on high-cost plans, remains a particular area of focus for employers. Other taxes that will be targeted include the health insurance tax and the medical device tax.
Obamacare taxes are making healthcare more expensive for employers and employees alike, says James Gelfand, senior vice president for health policy at the ERISA Industry Committee, a national association that advocates for large employers on health, retirement and compensation public policies.
“It’s super important that we eliminate taxes that are raising costs both for us and for them,” he says.
Limit the impact of 1332 Waivers: Employers also want to ensure that any changes to how so-called 1332 waivers are issued don’t have knock-on effects for employer-sponsored care. The waivers allow states to modify certain ACA health insurance requirements, such as essential health benefits and tiers of coverage, and several bills debated this summer included steps to streamline the process for states to obtain the waivers.
It’s an issue that could indirectly affect employer-sponsored care down the line, and it’s one that employer groups will be watching closely. The Employee Retirement Income Security Act currently bars states from passing any laws that would impact employee benefits, including employer-sponsored healthcare.
“Proposals such as providing states more flexibility, which we definitely support, could eventually lead to the erosion of ERISA, if states become accustomed to implementing their own health plans,” says Chatrane Birbal, senior advisor for government relations at the Society for Human Resource Management.
Employer groups say that they are broadly concerned the application of state-by-state variations in healthcare on the exchanges could potentially affect employer coverage in the longer term.
“Our feeling about this is that granting more flexibility to states is fine, as long as it’s focused on individual markets and potentially the small employer market,” says Jim Klein, president of the American Benefits Council. “For large, multi-state employers, the notion that there could be any erosion of the federal ERISA preemption is very troubling. I don’t think there’s necessarily any direct intention to adversely affect large, multi-state employers, so we’re just working with Congress to ensure that doesn’t happen inadvertently.”
Modify the definition of full-time work: Employers plan to continue to advocate for reforms that would raise the bar for when insurance must be offered to workers. The ACA defined full-time work at 30 or more hours, which employers have argued raised their costs, because they had to extend health benefits to additional people.
“It makes sense to set the bar at 40 hours, and if a particular retailer wants to offer coverage at a lower level, it can do so,” says Neil Trautwein, vice president of health care policy at the National Retail Federation.
Reduce reporting requirements: Efforts to fix the ACA’s reporting requirements for employers were largely blocked in the Senate this summer, because the issue could not be considered as part of budget reconciliation. Larger employers must report information about whether they offer coverage to full-time employees, whether that coverage meets certain minimum requirements and its cost.
Standalone bills that focus on streamlining employer requirements are likely to be introduced again this fall.
“We’d love to fix the dysfunctional ACA reporting system,” Trautwein says.
Improve health savings accounts: Gelfand says that employers are continuing to push for a broad array of changes to health savings accounts, including reforms that were not considered over the summer under budget reconciliation rules. Those might include efforts to allow use of HSA funds on concierge care or on a broader array of health activities, like the purchase of gym memberships or activity trackers, in addition to the changes that were introduced as part of earlier bills, such as raising the cap on contributions.
Stabilize individual markets: Many lawmakers are now focused on trying to advance a more limited package of reforms with bipartisan support that would also help shore up the state exchanges.
The Trump administration agreed to pay certain cost-sharing reduction subsidies to insurers for the month of August, but has yet to guarantee that the payments will be made through the rest of the year without congressional authorization. Cutting off those payments could significantly destabilize the exchanges in a number of states.
The issue is another that does not impact employer-sponsored plans directly, but numerous business and employer groups have spoken out in favor of shoring up the individual markets going forward, because of the indirect impacts.
“To the extent that there’s greater instability and more uninsured [in the absence of the CSR payments], the rest of us, whether that’s individuals or companies, end up getting cost-shifted,” Klein says. “We think this needs to be stable and funded.”
It’s also possible that any legislation addressing the subsidies could ultimately include other reforms beneficial to employers, including some of the items outlined above.