While it still has to pass the Senate before becoming law, the American Health Care Act, passed by the House of Representatives on May 4, could have a dramatic impact on health care plans in the years ahead. Here’s a brief look at how the AHCA could impact employers:
- The American Health Care Act has eliminated the Affordable Care Act’s requirement that employers provide health insurance to employees. Chatrane Birbal, senior adviser, government relations, for the Society for Human Resource Management, said she doesn’t see a major change in company health-care benefits. “I don’t envision a mass exodus of employers offering their employees healthcare coverage,” Birbal said in Employee Benefit News.
- Pre-existing conditions, which were covered under the ACA, or Obamacare, are now under the guidance of individual states. While the AHCA still requires insurers to provide coverage for people who have a pre-existing injury or ailment, it allows states to charge higher premiums to those with pre-existing conditions who let their coverage lapse.
- Implementation of the so-called Cadillac tax has been delayed until 2026. The plan, which imposes a 40 percent excise tax on employer-provided health-care plans that exceed $10,200 for individuals and $27,500 for families, was supposed to take effect in 2020.
- State governments have increased power over health insurance policies. States could allow employers to offer policies without mandated coverage, including maternity care and treatment for mental health issues, among others. Employees could offer less expensive plans with fewer benefits.
- Taxes on health savings accounts have been eliminated and limits on contributions to flex-spending accounts have been relaxed. Under the AHCA, individuals can put $6,550 into a tax-free account while families can contribute $13,100. Dan Kuperstein, senior vice president of compliance for Corporate Synergies, says these accounts will likely become more popular and more useful if implemented. HSAs will be used to reimburse plan participants for over-the-counter medications and the new rules would allow spouses to make catch-up contributions to an HSA. In Employee Benefit News, Kuperstein wrote that the various changes in HSAs would require more information from employers as there will be a greater need for employees to understand their coverage.