Replace & Repeal

MMA Blog

The proposed legislation to “repeal and replace” the Affordable Care Act (ACA) continues to dominate news coverage.  We thought you would appreciate a summary of MMA Michigan’s review and thoughts on the issue.

The proposed “repeal and replace” legislation is called the American Health Care Act (AHCA).  It has been passed by several committees and recently scored by the Congressional Budget Office (CBO).  The CBO score showed the AHCA would increase the number of people without health insurance by 24 million by 2026, while slicing $337 billion off federal budget deficits over that time.

The AHCA still has a number of hurdles to cross before it can potentially be signed into law.  However, it is important to understand the basic provision included in the AHCA.  You’ll find a summary of the major provisions below:
You’ll find a summary of the major provisions below:

  • Employer mandate penalty goes to $0 as of 2016
  • Individual mandate penalty goes to $0 as of 2016
  • Premium tax credits on the public exchanges (as we know them today) go away as of 2020
  • Cost-sharing reductions on the public exchanges go away as of 2020
  • Individuals who get tax credits in error must repay ALL of it for 2018 & 2019 (today there is a cap on how much to repay)
  • Most taxes are repealed as of 2018
  • Cadillac tax stays alive but doesn’t start until 2025
  • New premium tax credits for individuals begin in 2020, based on age ($2,000 – $4,000), but not available for individuals with a modified adjusted gross income of $75,000 individual or $150,000 joint filers
  • Simplified reporting (on a W-2) coming, date TBD
  • H.S.A. contribution limits increased to match MOOP as of 2018
  • Repeals Medicaid expansion as of 2020
  • Non-Medicaid expansion states eligible for “safety net funding” 2018 – 2022
  • The small group & individual markets will be subject to  a continuous coverage provision as of 2019 (and for Marketplace special enrollment periods in 2018) – individuals with more than a 63 day gap in coverage in the prior 12 months will be subject to a 30% increase in premium for the next 12 months – this means certificates of creditable coverage will probably make a comeback
  • Small group & individual plans won’t have to conform to the Actuarial value / metal tiers as of 2020
  • Small group & individual plans age bands go to 5:1 (from 3:1) as of 2018

What is not included?  Taxation of health benefits.  Does this mean we are off the hook?  Not necessarily, it just means taxing benefits isn’t in this draft language.  We need to consider that both repeal & replace AND tax reform are both major priorities for the administration in 2017.

Are these provisions final?  Probably not.  It still has a long way to go before it could become law and anything can change.  The Senate parliamentarian needs to approve these provisions as acceptable under reconciliation.  Also, expect a lot of opposition, especially to repealing Medicaid expansion and the age determination for tax credits.

Until any changes are final, we will need to stay the course as the ACA is still the law of the land and compliance is required.  As this continues to unfold, we’ll be sure to be in touch with timely updates.  In the interim, we hope this is helpful.

MMA Michigan, as always, is on top of this issue. To speak with one of our experts, call (248)822-8000.

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About Marsh & McLennan Agency – Marsh & McLennan Agency LLC, a subsidiary of Marsh, was established in 2008 to meet the needs of midsize businesses in the United States. MMA operates autonomously from Marsh to offer employee benefits, executive benefits, retirement, commercial property & casualty, and personal lines to clients across the United States.