Newly Proposed House Bill Includes Surprises for Employers

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Newly Proposed House Bill Includes Surprises for Employers
Calendar07 March 2017

On Monday evening, just as those of us on the East Coast were getting ready to call it a day, House Republicans unveiled the repeal and replace bill we’ve all been waiting for.  While we haven’t finished our analysis yet, we have selected a few of the many articles on the bill for your perusal, including a long piece in the New York Times.  One major headline: The bill didn’t include a cap on the tax exclusion for individuals covered in employer-sponsored plans, which was a welcome surprise since it had been included in an earlier leaked draft.  But the unpopular Cadillac tax remains.  The bill “repeals” the Cadillac tax only until 2025, which means it would still cast a shadow over employers’ long-term strategic planning.

Other big issues?  The Medicaid expansion would be frozen in 2020 and then phased out, and Medicaid funding would be converted to block grants.  This is a concern for employer health plan sponsors because of the likelihood that an increase in uncompensated care would result in cost-shifting to group plans by hospitals and other health care providers.  How Medicaid is treated in the bill also looks to be the biggest potential roadblock to its passage: four GOP senators have already said they won’t sign on to changes in Medicaid funding that “could result in a reduction in access to life-saving health care services.”  That would be enough to stop the bill if no Democratic senators vote to pass it.

Of course, the current bill is likely to change, especially since the Congressional Budget Office hasn’t yet scored the bill to determine any future impact on the deficit.  “Mark-up” begins in the House on Wednesday.  That’s the period during which lawmakers can amend the bill before putting it to a vote.  We’re busy reading the bill ourselves and evaluating the impact it will have on employer-sponsored plans – where, as we keep reminding Congress, 177 million Americans are now covered.

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