These healthcare proposals make policy sense, industry lobbyists say — if only Congress would act
If Congress could, against all odds, find a way to work in a bipartisan fashion to push initiatives that are widely supported, benefits industry leaders have a list ready for them.
With last week’s midterm election resulting in a Democratic House and a Republican Senate, employers are calling on the new Congress to focus on reforming healthcare legislation while addressing employer pain points.
At the top of the wish list for large employers is repealing the unpopular Cadillac tax — the Affordable Care Act’s tax on high-cost health plans, which has been a rallying cry for employer groups. Beginning with the 2022 tax year, the law requires plan sponsors and insurers to pay a 40% excise tax on the excess cost of employer-sponsored health coverage for employees — amounts over $11,100 for employee-only and $29,750 for family coverage, adjusted for inflation annually.
Employer and employee premium contributions will count against the threshold, as will most employer and pretax employee contributions to health savings accounts, flexible spending accounts and health reimbursement accounts.
“Everyone hates the Cadillac tax. Everyone. Repealing or modifying the excise tax has always had bipartisan support,” says Colleen Bruce, a health policy adviser at the National Alliance of Healthcare Purchaser Coalitions.
The tax was set to take effect this year, but was delayed for two years. In January, Congress passed and President Trump signed into law another two-year delay.
Employers, who argue that the Cadillac tax will substantially increase the cost of providing group health plan coverage and will raise costs or reduce benefits for employees and their families, have been calling for its delay and eventual repeal. A group that advocates for its repeal, called the Alliance to Fight the 40, counts more than 50 coalitions — including the Council of Insurance Agents and Brokers, Employers Health Purchasing Corporation, the Independent Insurance Agents & Brokers of America and the National Association of Health Underwriters — as members.
“Protecting the employer-provided health insurance system is a winning issue, not only for Congress, but for the 181 million Americans who get health insurance from their job,” says Jim Klein, president of the American Benefits Council, a Washington-based trade association for large plan sponsors.
Absent changes, companies may curtail benefits or increase workers’ out-of-pocket costs, says Steve Wojcik of the Washington-based National Business Group on Health.
Employers also are hoping Congress will focus attention on health savings accounts. In July, the GOP-controlled House passed two measures to expand the use of the accounts, but the Senate has not acted on the bills.
The proposals represent “a huge opportunity for us to modernize health savings accounts to be more aligned with value-based benefits and could make necessary healthcare more affordable for middle class families,” says Michael Thompson, CEO of the National Alliance of Healthcare Purchaser Coalitions.
Employers hope the new rules would allow the use of HSA dollars for wellness benefits that promote activities such as exercise and physical activity, and allow HSA-linked high-deductible health plans to offer pre-deductible coverage for services and medications designed to manage chronic conditions.
Another legislative goal: Simplifying ACA employer reporting requirements.
Last year, Reps. Diane Black (R-Tennessee) and Mike Thompson (D-California), along with Sens. Rob Portman (R-Ohio) and Mark Warner (D-Virginia), introduced a plan that would have eased the ACA’s annual reporting obligations.
It called for the creation of a voluntary employer prospective reporting system to make data available during the exchange enrollment process, rather than at the end of a tax year. The proposed system also would allow for electronic transmission of employee and enrollee statements, rather than requiring that the information be provided only by mailed paper statements.
The legislation was backed by the Society for Human Resource Management, with HR professionals arguing the reporting requirements have impacted business operations and created administrative burdens. A 2017 SHRM member survey found that 62% of HR professionals said reporting requirements were their biggest ACA challenge, while 66% reported they outsourced at least some of the reporting requirements.
“The reporting requirements need streamlining, and they should look at unnecessary notice and reporting,” Wojcik says.