New Bipartisan Bill Applies To Employer Sponsored Health Plans | Mercer US

New Bipartisan Bill Applies To Employer Sponsored Health Plans

Our Thinking / Healthcare /

Bipartisan Bill Would Repeal Cadillac Tax
Calendar05 May 2015

A new bipartisan House bill would repeal the Affordable Care Act's excise tax that applies to high-cost employer-sponsored health plans starting in 2018. Flanked by supporters from business, labor, and other groups at a Capitol Hill event, lead sponsor Rep. Joe Courtney, D-CT, called the tax a "flawed, one-size-fits-all penalty that will degrade workers' benefits." Three Republicans and 66 Democrats are co-sponsoring the measure, but next steps are unclear. Lawmakers are expected to propose an alternative measure to ease the impact of this tax.

If the Supreme Court rules against premium subsidies in the 34 states with federally-facilitated marketplaces (FFMs), Pennsylvania will switch to a state-based marketplace (SBM). In a letter to HHS, Gov. Tom Wolf has declared Pennsylvania's intention to set up a SBM in 2016 that would continue to rely on the federal technology platform,, to enroll individuals. While few states are likely to follow Pennsylvania's lead, the National Conference of State Legislatures reports at least 10 states have proposed legislation to convert FFMs into SBMs. The Supreme Court is expected to issue its ruling in June.

State decisions on Medicaid expansion continue to develop as governors and state legislatures debate and revise strategies. The ACA gives states the option of expanding their Medicaid coverage to individuals with household income up to 133% of the federal poverty level (FPL) — though the methodology for calculating income will make the effective minimum threshold 138%. Employers may face penalties for full-time employees with income between 100% and 138% FPL who obtain coverage through an exchange and receive exchange subsidies. As there is no deadline for choosing to expand Medicaid eligibility, tracking the expansion status of states is an ongoing task. To date, 28 states and the District of Columbia have opted to expand Medicaid under the ACA, either by broadening the traditional program or using an alternative approach.

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