Thursday, February 19, 2015

Changes to ACA possible during 114th Congress despite gridlock

Continued gridlock is expected during the 114th Congressional session in
Washington D.C. that began in January. Republicans are expected to propose,
and perhaps pass, significant changes to the Affordable Care Act, only to be
vetoed by President Obama.

However, it’s possible that some changes having bipartisan support may survive a veto, and we could also see some changes to the Affordable Care Act (ACA) made with executive authority. The Supreme Court could even have an impact.

Some potential issues we’re watching closely are:

Changes to the employer mandate.
The law currently requires that employers with 50 or more full time equivalent (FTE) employees offer health care to employees who work at least 30 hours a week or pay a penalty. There is some support for changing that to employees who work 40 hours a week.

Repeal of the medical device tax.
The tax, which went into effect in 2013, was initially passed to help offset the cost of expanding health care coverage to more Americans. There is bipartisan support in Congress for repealing this tax.

Cadillac tax.
The ACA established a tax on employers that offer high cost health benefits—or “Cadillac” plans—to their employees. This tax is due to be implemented in 2018. However, because this type of tax is difficult to operationalize, and with
significant resistance from employers and unions, there is speculation that the
administration could delay or modify its implementation.

King v. Burwell.
The Supreme Court recently agreed to hear a case that challenges whether the federal government can legally provide subsidies through the federally facilitated exchange. Given that Washington runs its own state-based exchange
(Washington Healthplanfinder), the decision in this case won’t directly affect
our market. But it could affect roughly half the states, putting the ACA on
weaker footing nationally.

Of course, none of these changes are certain, and we expect many surprises
as well.