Employer 411: The American Health Care Act

Courtesy of Harvard Business Review

Courtesy of Harvard Business Review

President Trump may be a lot of things but so far he's been pretty on point with following his campaign promises regarding topics like immigration and healthcare.  This was further evidenced yesterday when the House Ways and Means Committee approved the American Health Care Act (AHCA), which replaces certain parts of the Affordable Care Act (ACA).  Since its looking like the AHCA is going to become the new realm of healthcare in the U.S., here are some key facts Employers should know:

Remember the ACA?

Sure you do.  It probably caused you (and all other HR professionals) to pull your hair out and possibly start drinking on a regular basis.  The ACA was thousands of pages of regulations that few people actually understood.  Despite its many challenges, it did prove to revolutionize healthcare and caused a lot more people to get covered by health insurance.  Like all things, though,  it was not perfect and President Trump vowed to repeal it.  Enter the AHCA. 

The AHCA does what?

The AHCA is designed to repeal/revise the ACA in a manner that makes it more friendly to employers and health insurance companies while still offering ACA-like protections to consumers.  Here are some key notes about the AHCA:

1. The Employer Mandate penalty will be reduced to $0.  This will essentially nullify the Employer requirement to offer minimum healthcare coverage to employees.  The mandate may be repealed altogether in future legislation but until then, Employer reporting requirements will still be a thing. 

2. Likewise, the Individual Mandate penalty will be reduced to $0.  This also essentially nullifies the Individual Mandate that requires people to purchase healthcare coverage through the marketplace exchange if not already covered in an employer health plan.  

3. There will be a continuous coverage surcharge for people who lack continuous coverage. Basically, if you  are not covered for 63 continuous days within a 12 month period, your premium will have a 30% surcharge added to it.  For people coming out of their parent's healthcare plans, this means they will need to enroll in the first available open enrollment period to avoid the surcharge.  

4. There will be no more limits on FSA contributions which means employees can contribute more than the previous $2,500 limit on FSA contributions.  

5. Healthcare plans must continue to cover pre-existing conditions and guarantee availability and renewability of coverage.  The same ACA anti-discrimination policies will also still exist.

6.  Dependents can continue to remain on their parents' healthcare plan until the age of 26.  

It is expected that the AHCA will be voted by the House sometime around the week of March 20th.  Until then, stand by...