With the July 28 defeat of health care reform legislation on the Senate floor, the ACA remains in effect. However, the political uncertainty surrounding the law continues. So, as policymakers determine their next steps, here are a few points for employers to keep in mind:
- The ACA remains the law of the land – and has not changed this year. Despite active legislative discussions and significant political attention, no ACA changes have been enacted during this year’s debate. Employers should continue to comply with the ACA until changes are enacted and take effect.
- The ACA 40% excise tax on high-cost group health plans (often referred to as the Cadillac tax) is scheduled to take effect in 2020, although the recent legislative debate shows that Congress may be willing to further delay or repeal the tax. Given the favorable impact of this tax on the federal budget, delay may be likelier than outright repeal (note that this tax has already been delayed once, from 2018 until 2020).
- States are seeking innovation waivers under ACA Section 1332. Separate from the discussions in Congress, the Department of Health and Human Services has encouraged states to seek waivers that give states greater flexibility to help stabilize their insurance markets. The uncertain legislative outlook could prompt other states to seek waivers.
- Concern about the stability of the individual market remains – especially regarding the continued payments to insurers for cost-sharing reductions (CSRs), which offset out-of-pocket costs for low-income individuals and are a key factor in the current uncertainty about the individual market. The White House has not committed to paying CSRs in the future. If these payments are not secured, insurers may react by raising rates or electing to leave markets entirely. Watch for three key dates in August and September 2017:
- August 16 is the last day for carriers to make changes to their public exchange plan filing applications.
- August 20 is the next judge-appointed check-in for the House v. Price lawsuit (on CSRs).
- September 27 is the last date carriers can send signed agreements to CMS.
The health care debate will continue to be marked by unknowns – both in terms of specific actions and timelines. As it plays out, it will be important for employers to continue on their current paths but keep an eye out for changes that might require additional action.
John Barkett is the senior director of policy affairs in the Benefits Delivery and Administration practice at Willis Towers Watson.
Ann Marie Breheny works in the Willis Towers Watson Research and Innovation Center, where she tracks federal legislative activity.
Barry Carleton is a consultant in the Health and Group Benefits practice at Willis Towers Watson.
Julie Stone is North America Leader, Health & Benefits Intellectual Capital and Specialty Practice Integration at Willis Towers Watson.