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What Proposed Changes to the Affordable Care Act (ACA) Mean to You

On May 4, 2017, the U.S. House of Representatives passed the American Health Care Act (AHCA).

It has now moved to the Senate for review and revisions. But the Senate debate could take months and may result in more changes.

In the meantime, here is a quick look at what current provisions in the bill could mean for you and your employees.

How the AHCA May Affect Your Business

The AHCA’s main focus is on reforming the individual market and Medicaid. But possible impacts to your employees and changes to requirements could alter your benefit plans. For example:

  • Under the ACA, businesses with 50+ full-time employees are required to offer adequate and affordable health coverage or pay fines. The AHCA repeals the employer mandate fines. If the AHCA is passed as is, employers wouldn’t face penalties beginning in the 2016 tax year.
  • Currently, for the individual market and for employers with less than 50 employees, insurance coverage must cover 10 categories of essential health benefits. These include maternity care, emergency services, and hospitalizations, among others. The AHCA would let states apply for waivers to define their own Essential Health Benefits (EHBs) within the 10 categories.
  • Redefined EHBs for individual plans and plans offered by employers with less than 50 employees could mean higher cost-sharing for members on benefits their states do not define as essential.
  • Under the ACA, large employers are not currently required to offer plans that cover EHBs. If they do cover EHBs, they can’t impose annual or lifetime dollar limits on those benefits. Right now it’s unclear if EHBs as defined by states under the AHCA will be applicable to large employers.


What’s Next?

The AHCA will be voted on by the Senate, where more changes are expected. Because of Senate rules and differences among the Republican leadership, progress on the bill will likely be delayed further.

A Conference Committee will be created to settle any differences between the House and Senate versions of the bill. Once an agreement is reached, the bill will be sent to the President’s desk, where it will likely be signed into law.

The health care reform process is in its initial stages, and the future of the AHCA is still uncertain. But it’s important to understand the proposed changes as they develop and what those changes might mean for your business.