Repeal & Replace: ACA remains law of the land

Floor loss may go a long way in dictating the GOP’s ambitious Capitol Hill agenda

As you probably know, Congress decided not to proceed with a planned vote on the American Health Care Act (AHCA) last week, which would have repealed and replaced important elements of the Affordable Care Act (ACA).

The proposed legislation would have expanded HSA eligibility, increased HSA contribution amounts, and reversed some of the ACA provisions that were detrimental to consumer-directed health plans…such as the cap on employee contributions to FSAs and the prohibition on reimbursements for over-the-counter medications. The bill also delayed the effective date of the excise tax on high-cost health plans (commonly referred to as the “Cadillac Tax”).

Now what?

Plenty could still change regarding the ACA; legislative action was only part of the GOP’s plan. Another component – making changes to regulations and how the ACA is administered – doesn’t require Congress’ help.

For example, the Trump administration can’t do away with the mandate requiring individuals to have health insurance on its own, but it can greatly weaken it through the IRS. Both the individual and employer mandates are about tax incentives (i.e. get insurance or pay a fine), so the executive branch could simply decide not to enforce that penalty.* In fact, the President has already signed an executive order directing government agencies to begin unraveling portions of the healthcare law. The order encouraged department heads to “waive, defer, grant exemptions from or delay the implementation” of provisions aimed at imposing fiscal burdens on states, companies or individuals.

A looming push to overhaul the U.S. tax code could also include the repeal of ACA levies left intact by the collapse of the Republican measure. Tax Reform will be an important priority for those in the employee benefits space, as discussions are once again likely to include many of the same elements contained in the AHCA (see above)…along with potential changes to dependent care, transit and parking, or even the exclusion of employer provided health insurance.

Regardless of your political views, portions of the AHCA highlighted/recognized the importance of consumer-directed health accounts and TASC will continue to advocate for policies which support and expand these plans.

To be continued…

* The IRS has said it will not reject “silent returns” — tax returns on which a person declines to say whether they have insurance.

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