Employers’ hopes that Congress would use the lame-duck session to address key items on their health policy wish list are fading as the clock winds down and President Trump’s demand for $5 billion in border wall funding are drawing out already complicated negotiations on year-end spending legislation. Former President George H.W. Bush’s death delayed congressional activity this week, but a short-term measure expected to pass within days leaves lawmakers until December 21 to consider a crush of unfinished business in addition to the spending bill.
Among the possible casualties are bids to repeal or delay the Affordable Care Act’s (ACA) Cadillac tax on “high-cost” plans, as well as the law’s health insurance and medical device taxes. A House Republican tax bill released last week didn't address any of the ACA’s taxes. And an employer-friendly package of ACA changes that House leaders had planned to vote on during the lame-duck session is now unlikely to see action. That package, the Save American Workers Act, would redefine a full-time employee as someone working an average of 40 hours per week, retroactively suspend the employer mandate, slightly ease employer reporting duties, and delay the Cadillac tax until 2023.
The bill’s Cadillac tax delay would cost about $13.6 billion between 2019 and 2028, and retroactive suspension of the employer mandate would cost $25.9 billion over the same period, according to a Congressional Budget Office report. The measure does not call for any revenue offsets, a sore point for some Democrats otherwise inclined to support delay or repeal of the Cadillac tax.
Under the bill's modified ACA reporting requirements, minimum essential coverage (MEC) providers would furnish coverage statements to individuals only if requested, but MEC reporting to the IRS would continue unchanged. Large employers would still have to report coverage offers and related information to the IRS and issue companion statements to individuals. The IRS uses this information to assess employer mandate penalties and administer premium tax credits for public exchange coverage. These reporting changes don't go as far in easing these employer obligations as prior bipartisan legislation had proposed, and both parties may want to pursue such relief in the next Congress.
Also likely to be left for the next Congress is a House-passed package of reforms that would expand and improve the flexibility of HSAs and high-deductible health plans (HDHPs). Some of the reforms -- such as expanding pre-deductible coverage beyond preventive care, allowing individuals to use HSAs to fund direct primary care service arrangements, and letting individuals use employers’ onsite medical clinics without risking HSA eligibility – have bipartisan support.
House Democratic leaders have already said they are looking at creating and passing legislation in the next Congress to bolster the ACA and protect coverage for preexisting conditions. That package could be the right type of vehicle to carry some employer-focused legislation. Bipartisan reforms like targeted HSA improvements and eliminating the Cadillac tax and other ACA taxes could hitch a ride, though how to replace lost revenue will continue to be a hurdle.
So 2018 appears to be coming to an unusually peaceful end in a Congress that featured bitter fights over health care, although some policy changes could yet surface as "riders" to the year-end spending package.