On Tuesday, Senate Majority Leader Mitch McConnell (R-Ky.) announced a vote on a health care bill would be delayed for the time being. The delay comes one day after the non-partisan Congressional Budget Office estimated that the Senate bill, formally called the Better Care Reconciliation Act (BCRA), would lead to an increase of 22 million uninsured Americans by 2026.
With Republican support for the bill in need of a boost to get the 50 votes needed for passage, changes to the Better Care Reconciliation Act could be coming in the days ahead.
With the action at a standstill for now, here is an outline of provisions in the current Senate health care bill that could affect employees and employers:
What would change if the Senate bill is enacted? Some big changes for employers and employees are proposed in the Better Care Reconciliation Act, including: Elimination of the employer mandate. Beginning in the 2016 tax year, penalties would be eliminated for applicable large employers (50 or more full-time employees) who do not provide full-time equivalent employees affordable health coverage. While the Internal Revenue Service health coverage reporting requirements would still be in place, the IRS could eliminate or scale back employer reporting rules.
Elimination of the individual mandate. The Senate bill would remove penalties for individuals who do not maintain health insurance. In a change from the health bill that passed the House in May, there would be no increase in insurance premiums for individuals who let their health coverage lapse. However, the Senate bill would allow an insurer in the individual market to impose a waiting period of six months on an enrollee who had had a gap in coverage of 63 days or more during the preceding 12 months. This could give individuals incentive to keep employer-sponsored group coverage.
Delay of the “Cadillac Tax” until 2026. Affecting one in four employers, the Cadillac Tax is an excise tax to be imposed on high cost employer-sponsored group health plans.
Flexible Spending Account (FSA) limits would be repealed entirely. There would be no limit to FSA contributions, with qualified expenditures to include over-the-counter medications.
Health Savings Account (HSA) tax-free limits would be increased. The new limit would nearly double the current limit, because the new limit would equal the limit on out-of-pocket cost-sharing under qualified high-deductible health plans. (The current 2018 limits: $6,650 for self-only coverage, $13,300 for family coverage.) Also, the qualified medical expense definition would be expanded to include over-the-counter medications, as well as expenses incurred up to 60 days prior to date HSA was established. What would stay the same if the Senate bill is enacted? Most of the insurance reform under the Affordable Care Act will not be changed under the Better Care Reconciliation Act, including:
• Requirement to cover pre-existing conditions.
• Requirement to cover dependents until age 26.
• Out-of-pocket maximums.
• Lifetime and annual limits.
• Preventative benefits must be covered, with no cost-sharing.
• Essential health benefit requirements.
Other elements remaining in place in the Senate's health care bill include:
• Employer-sponsored group health coverage would continue to be purchased using pre-tax dollars.
• Wellness incentives remain the same, including premium incentives for biometric screenings and a surcharge for tobacco use.
We will be closely monitoring the situation and will announce important updates that affect employers and plan sponsors. For more information on the Senate health care bill and other employee benefits matters, contact a Plexus client service team representative in Deer Park, Ill. (847-307-6100), Chicago (312-606-4800), Dallas (972-770-5010) or Oklahoma City (405-840-3033).