House passes ACA “repeal and replace” bill: Now what?

House passes ACA “repeal and replace” bill: Now what?

Posted by Robert B. Davis and Rick Wald on June 2, 2017.

Now that the House has approved a bill to “repeal and replace” key parts of the Affordable Care Act (ACA), all eyes are on the Senate to see what will happen next. Here’s what we know so far.

Rather than simply accept the House bill, Senate Republicans have formed a 12-person working group to develop a Senate proposal. Some of the provisions in the House-passed bill that may come under scrutiny in the Senate include:

  • Eliminating ACA’s Medicaid expansion by 2020
  • The refundable premium tax credit to help lower-income individuals pay for insurance if they do not have access to coverage from an employer or other sources
  • The option for states to seek waivers of the ACA’s community rating and essential health benefits rules

Significant changes to key employer-related provisions in the House-passed bill—such as zeroing out the Employer Shared Responsibility penalty—are not likely. However, changes to the proposed premium tax credit could impact the extent and complexity of related employer reporting requirements.

Still, whether the Senate will pass a bill, and what it might look like, are very much open questions at this time. As in the House, the appropriate scope of “repeal and replace” could be the subject of considerable debate among Republican Senators. And with a narrow 52-48 majority, Senate leaders will have little room for error when attempting to reconcile any differences.

If the Senate does pass a bill that differs from the House-passed bill, the two competing proposals will need to be reconciled by a joint conference committee. The resulting conference report would then have to be approved by majorities in the House and Senate before it could be sent to the President for his signature. Alternatively, the House could simply take up and pass—without amendment—the Senate bill. Either way, the divisions in the House Republican caucus that emerged over the last few months likely will appear as obstacles again.

The process is expected to play out over a period of months, thus affecting the ability of Congress to move on to other major legislative priorities such as tax reform. The health reform and tax reform debates are closely linked because both are being advanced pursuant to the budget reconciliation process. As a procedural matter, Congress will need to finish work on health reform first before it can take up tax reform under a reconciliation instruction.

In the meantime, the ACA continues to be the law of the land. The IRS is collecting Individual Shared Responsibility penalties from those who fail to carry minimum essential coverage, and accepting Forms 1094-C and 1095-C from employers subject to the Employer Shared Responsibility rules. Those same employers still face potential penalties unless they continue to identify “full-time employees” and offer coverage to them that is both “affordable” and provides “minimum value.”

Robert B. Davis is a managing director in Deloitte Consulting LLP specializing in employer-sponsored retirement and health and welfare benefit plans. In addition to advising clients on a range of compliance-related issues, he leads the Washington Rewards Policy Center of Excellence.
Rick Wald is a managing director in Deloitte Consulting LLP and the national practice leader for Deloitte Consulting LLP’s Employer Health Reform Strategy practice and the Employer Health Care Consulting practice.

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