As you are probably very much aware, healthcare reform is on the horizon again. The U.S. House of Representatives recently passed the American Health Care Act (AHCA), which has been touted as the replacement for the Affordable Care Act (also known as the ACA or Obamacare). The bill, which passed the House by a vote of 217 to 213, moves on to the U.S. Senate.
How would this law impact Nevada employers if its passed by the Senate and signed by President Trump?
There are several things that we do not expect to change under AHCA:
Required coverage for preventive care – There would be no change to the requirement for individual and group healthcare plans to cover preventive benefits, including contraception and cancer screenings, with no cost sharing.
Pre-existing conditions exclusions – There would be no change to the prohibition on excluding individuals from coverage due to a pre-existing condition, which includes pregnancy, prior c-section, and history of domestic violence (however, there will likely be an increase in pricing for those with pre-existing conditions).
Dependent coverage until age 26 – Children up to age 26 would still be covered by their parents’ healthcare plan.
Wellness incentives under Obamacare
Health Reimbursement Arrangements (HRAs) for small business
Business reporting – Businesses would still be required to report on employees with healthcare (however, it will likely be simpler than the current 1094/1095 process).
Nevertheless, there are several things that will change:
Repeal of the individual and employer mandate – Employers would no longer be subject to penalties for failing to offer healthcare to employees. The monetary penalties would be reduced to $0 beginning in the 2016 tax year.
Elimination of the Small Business Tax Credit – Beginning in 2020, small businesses will no longer be able to claim the tax credit.
Delay of the implementation of the Cadillac Tax – The tax, which would have otherwise been assessed beginning in 2018, has been delayed until 2025. The Cadillac Tax requires health insurers and sponsors of self-funded group health plans to pay a tax of 40% of any dollar amount beyond the cap ($10,200 for individual coverage; $27,500 for family coverage) that is considered “excess” health spending.
State waivers to re-define health benefits – Beginning in 2020, state will be able to apply for waivers to re-define the essential health benefits for health insurance coverage offered in the individual or small group market. Under the ACA, coverage is required for ten essential health benefit categories, including ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services, chronic disease management, and pediatric services.
Lifetime and annual dollar limits – The prohibition on lifetime and annual dollar limits will only apply to essential health benefits, which, as previously stated, states will be able to re-define beginning in 2020. Annual limits are the total benefits an insurance company will pay in a year while an individual is enrolled in a particular health insurance plan.
Changes to state exchanges – While state exchanges will continue, beginning in 2020 the premium tax credits may be used for eligible non-group policies regardless of whether they are sold through an exchange or not.
Health Savings Accounts (HSAs) – The AHCA encourages the use of HSAs by increasing the maximum contribution limit: $3,400 for self-only coverage and $6,750 for family coverage in 2017. The ceiling to raise higher in 2018: $6,550 for self-only coverage and $13,100 for family coverage. These pre-tax dollars could be used to pay for over-the-counter medications and would be available almost immediately for expenses incurred subject to a high-deductible health plan.
We won’t know what the final AHCA will look like if and when it makes its way to President Trump’s desk; the Senate has already stated that it intends to re-write the bill. However, Nevada employers can rest assured that the Nevada Association of Employers (NAE) will follow the bill through the Senate and will provide an update regarding the latest developments.
To learn more about what the Nevada Association of Employers can do for you as a Nevada employer, contact us at (775) 329-4241 or membership@nevadaemployers.org.
