The ACA: Where do we go from here?
Do you remember the dramatic 2001 World Series between the Yankees and Diamondbacks? How about the Diamondbacks’ improbable bottom-of-the-ninth rally against Mariano Rivera? Wasn’t that an unbelievable finish to an unbelievable series? The next day, I called my dad and asked if he’d ever seen a more memorable finish to a World Series. His response was anticlimactic, “Actually, son, I went to bed at the end of the eighth inning.”
Isn’t one of the most fascinating things about life how we eventually become the person that perplexed us in our youth? For example, last week, I went to bed before the ninth inning of Game 7 of this year’s World Series. And, last night, I retired long before the presidential election was decided. I guess living and dying in Eastern Standard Time has its tradeoffs.
I’m pondering what changes we might see in 2017 to the Affordable Care Act as it relates to employer-sponsored health plans. What comes to mind is the metaphor Bill Clinton shared in 1992 about the dog that chased the car and actually caught it. After years of promises to repeal the ACA, the Republican Party, with imminent control of the executive and legislative branches, seems awfully close to catching the ACA car.
However, to me, it seems extremely unlikely that the ACA will be repealed in full. It’s like trying to put scrambled eggs back into their shells. Specific to employer-sponsored plans, let’s consider what might happen to the ACA next year:
What’s unlikely to be repealed:
· The ban on pre-existing condition limitations. Per the Republican’s June 2016 ACA replacement proposal, “No American should ever be denied coverage or face a coverage exclusion on the basis of a pre-existing condition.”
· The extension of dependent coverage to age 26.
· The ban on annual and lifetime limits. Per the same proposal, “For example, we would allow dependents up to age 26 to stay on their parents’ plan… We also support changes that end the practice of imposing lifetime limits on the coverage provided to individuals.”
· 100-percent coverage for preventive services.
· Out-of-pocket maximum ceilings.
· The 90-day waiting period restriction.
· The increase in the penalty on nonqualified health savings account (HSA) distributions from 10% to 20%.
Unimplemented provisions that will likely fade away:
· ACA nondiscrimination requirements. As a reminder, Sections 125 and 105(h) nondiscrimination rules remain alive and well.
· The Cadillac tax. Last December, 90 senators voted to repeal this excise tax. If repeal is again passed by the House and Senate, it’s unlikely the bill will be vetoed.
As a reminder, many ACA provisions have already been repealed, including free-choice vouchers, Form 1099 reporting, the $2,000-deductible ceiling, the automatic enrollment mandate and the mandatory expansion of small group to 100 employees.
Provisions that could be adjusted:
· Employer-shared responsibility. It turned out that offering adequate, affordable coverage to all full-time employees isn’t as difficult as it once seemed. Even if this provision is repealed, it’s likely that most employers that introduced adequate, affordable high-deductible health plans will leave those lower priced plans in place for their employees. If this provision is adjusted and not repealed, we may see the definition of ACA full-time employee change from someone who works 30 hours or more per week to someone who works at least 40 hours. We may also see some relaxing of the complexity surrounding variable-hour employee tracking and ACA reporting requirements, such as Forms 1094-C and 1095-C.
· The $2,600 flexible spending account cap. Remember the pre-ACA days when any cap on employee contributions to health care FSAs was at the employer’s discretion? Six years later, with the ACA-driven surge in employer sponsorship of high-deductible health plans and HSAs, any change to the FSA cap will have minimal impact to most employees.
· The annual health insurer fee. This provision was suspended for 2017. Will it return in 2018, as scheduled?
· The Patient Centered Outcome Research Fee. Will this nominal fee continue? If so, will it continue applying to employer-sponsored self-funded plans or only to fully insured plans?
In short, I don’t foresee a significant ACA-related impact to employer-sponsored health plans in 2017. Of course, if predicting the future was easy, Joe Torre would have played the infield back when the bases became loaded in the bottom of the ninth of Game 7 of that memorable series.