So what is the “American Health Plan” from the house?

paul ryan american health care plan

Thanks to Keith Zuckerman from PGP for this:

Below are comments from our government affairs people at NAHU plus a very good summary of the new bill House GOP’ers put forth yesterday.  Keep in mind that this has a long way to go to become law and we will keep you apprised of future developments.  Some of the highlights are:

  • Employer Mandate.  The employer mandate would be eliminated as of January 1, 2016.  As a result, employers could still be liable for ACA penalties for 2015.
  • Employer Reporting.

o   Beginning for the year 2020, the Form W-2 would be required to indicate whether an employee was eligible for employer-provided coverage that disqualified the employee from the new individual tax credit (discussed below).

o   This bill does not address the 1095-C and 1094-C reporting rules.  However, a summary prepared by the Ways and Means committee suggests an intent to eliminate these reporting requirements:

The program also calls for simplified reporting of an offer of coverage on the W-2 by employers. Reconciliation rules limit the ability of Congress to repeal the current reporting, but, when the current reporting becomes redundant and replaced by the reporting mechanism called for in the bill, then the Secretary of the Treasury can stop enforcing reporting that is not needed for taxable purposes.

  • Cadillac Tax.  The Cadillac Tax would be delayed until 2025, but not fully repealed.
  • Tax Exclusion for Employer-Provided Healthcare.  The bill would not limit the value of health coverage that could be provided to employees on a tax-free basis.
  • Plan Design Provisions.  This bill would not change or remove any of the ACA’s market reform provisions.
  • OTC Drug Reimbursements.  HSAs and FSAs would again be allowed to reimburse over-the-counter drugs beginning in 2018.
  • FSA Limit.  The healthcare FSA reimbursement limit (currently $2,600) would be eliminated beginning in 2018.
  • HSA Provisions.  Beginning in 2018:

o   The maximum HSA contribution amount (currently $3,400/self or $6,750/family) would be increased to equal the maximum out-of-pocket maximum (currently $6,550/self and $13,100/family).

o   If both spouses are eligible to make catch-up contributions, they could make them both to the same HSA.

o   If an HSA is established within 60 days of the date an individual begins high deductible health coverage, qualified medical expenses incurred during the period of high deductible health coverage would be reimbursable tax-free from the HSA — even if they were incurred before the HSA was established.

o   The penalty tax for using HSA funds for non-medical purposes would decrease from 20% to the pre-ACA level of 10%.

  • RDS Deduction.  Medicare Part D retiree drug subsidies would again become deductible as a business expense beginning in 2018.
  • Individual Tax Credit.  A new advance refundable tax credit (designed to replace the current premium tax credit):

o   Could be used to pay for unsubsidized COBRA continuation coverage or state continuation coverage if the plan administrator certifies that the coverage meets certain criteria.  That certification must be made available to the public and meet any other requirements specified by the Secretary of the Treasury.

o   Would not be available to individuals who are eligible for employer-provided health plan coverage (other than excepted benefits).

o   Would be reduced if the individual was provided a qualified small employer health reimbursement arrangement (QSEHRA).

  • Continuous Creditable Coverage Requirement.  For plan years beginning on or after January 1, 2019, insurers would be allowed to increase individual and small group market insurance premiums by 30% for a period of twelve months for an individual who (i) had a gap in creditable coverage of at least 63 days in the previous twelve months or (ii) lost coverage as a dependent due to age and failed to enroll during the first open enrollment period following the loss of coverage.  Similar rules would apply to individuals enrolling through special enrollment in 2018.

o   The bill suggests that the requirement to provide certificates of creditable coverage might be reinstated.

  • Small Business Tax Credit.  The small business tax credit would be repealed beginning in 2020. Between 2018 and 2020, the small business tax credit generally would not be available for plans that provide coverage relating to elective abortions.