How the Politics Might Impact Employee Benefit Plans

One of President Trump’s major campaign promises was to repeal and replace The Patient Protection and Affordable Care Act (ACA). Since January, Republicans in Congress have been trying to come up with a plan that strikes a balance between shoring up the fiscal sustainability of the ACA and retaining some of its key benefits.So far, it has been a heated political battle. Democrats have opposed all of the Republican proposals, and many Republicans have voiced concerns, too. The House of Representatives passed a bill to repeal and replace the ACA on May 4, 2017, and the Senate put forth two versions of the Better Care Reconciliation Act (BCRA), but so far has been unable to garner enough support to pass the latest version of the bill. Now, Senate Majority Leader, Mitch McConnell (R-Ky.) is reportedly considering scrapping plans to replace the ACA in favor of trying to pass a straight repeal bill.

What Types of Changes do Republicans Propose for Healthcare?

Since we don’t yet know which way the political wind will blow, it’s worthwhile for employers to review the proposed changes in the BCRA, in order to gain insight into what a Republican-authored healthcare replacement may eventually contain:

1. Increased contribution limits for HSAs. The BCRA would increase the amount employees could contribute to Health Savings Accounts. Starting in 2018, limits would increase to $6,650 for individuals and $13,300 for families. This gives employees more flexibility to use tax-free savings for medical expenses and encourages medical consumerism.
2. No more individual mandate. The BCRA would remove the ACA mandate that requires every individual to have health insurance or pay an IRS penalty.
3. Small-group health plans sold across state lines. In an effort to bring down the cost of premiums for small businesses, the BCRA includes “a provision that would approve a small-group health plan to be sold in any state if it meets association health plan criteria.” This could give small businesses much greater purchasing power by banding together in associations.
4. Option to buy catastrophic insurance. The Cruz Amendment to the current bill would allow consumers in the private market to purchase cheaper catastrophic health plans. Catastrophic plans might not cover many of the 10 “Essential Health Benefits” enumerated in the ACA, including prescriptions, maternity, or mental health. However, there is a concern that all of the young, healthy people would buy the cheaper plans, leaving only older people and those with pre-existing conditions in the comprehensive plans, with premiums spiraling higher.
5. Expanded fund to fight opioid addiction. The BCRA increases the $2 billion in opioid treatment funds from the ACA to $45 billion.

Employees are Financially Stressed by Healthcare

Surveys reveal that Americans are very concerned about the future of healthcare and for good reason. 49% of employees are “concerned, anxious or fearful” about their financial wellbeing. In 2016, the annual healthcare cost for a family of four rose to $25,826, with 43% of the costs borne by employees.Pre-existing conditions affect many workers and their families. The Kaiser Family Foundation revealed that if underwriting practices returned to pre-ACA standards (as with a full repeal), “27% of adult Americans under the age of 65 have health conditions that would likely leave them uninsurable if they applied for individual market coverage.”

Employers Have Made Peace with the ACA

When the ACA was passed, it caused major angst and upheaval for employers in terms of the way their benefits plans were structured. But how do employers feel today? In a July 2017 survey by the International Foundation of Employee Benefit Plans, 71% of employers revealed they did NOT want to see the ACA fully repealed. In fact, 62% said if the ACA was repealed, they would keep all or some of its provisions in place for their employee plans.

Better the Devil We Know?

Many voices from Capitol Hill are arguing that the Senate should simply keep the healthcare status quo. And as the uncertainty surrounding the future of healthcare drags on, support from the public is building for the original ACA. In April 2017, the ACA gained the approval of 55% of Americans—a majority consensus for the first time, according to a survey by Gallup. But at the same time, the number of insurers offering individual health plans in the state exchanges dropped 38% year-over-year, and 41% of U.S. counties may only have one plan option available in 2018.

Stay Prepared for Health Plan Changes

With the spectre of more healthcare plan changes on the horizon, it’s more important than ever to have the technology in place to stay on top of health insurance, FSA and HSA plans. Asure Software’s Benefits Administration solutions allow you to streamline and efficiently manage your company’s processes with integrated Human Capital Management tracking.