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Farewell Mandates? ACA Likely to Change Substantially Under Trump Administration

By Stephen Miller
From Society for Human Resource Management on Friday, November 11, 2016
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"In terms of repeal, even Republicans—including the president-elect—support keeping some parts of the ACA that are popular, such as the insurance market reforms, allowing children to stay on their parents' plans until age 26 and the ban on pre-existing condition limits," said Steve Wojcik, vice president, public policy at the Washington-D.C.-based National Business Group on Health, which represents employers.

"The employer and the individual mandate are back on the table," Wojcik said. The employer mandate requires organizations with 50 or more full-time or equivalent employees to provide ACA-compliant health care coverage to their full-time employees (those working on average 30 or more hours per week) or to pay steep penalties. The individual mandate requires all adults without insurance coverage to buy an ACA-compliant policy or pay a tax penalty.

"Philosophically, employers believe that offering benefits should be voluntary. The mandate goes against that philosophy," Wojcik said. "But the big issue is that all of the reporting, tracking and other administrative burdens associated with implementing the employer mandate would go away without it," and these have been an enormous and costly compliance burden for many employers.

Eliminating the mandate also would let employers choose whether to offer health benefits as they see fit, and allow them to provide a wider range of offerings including "slim-down plans for part-time employees or in industries with high turnover," Wojcik explained. The ACA eliminated these so-called "skinny" or "lite" plans that provided low-cost coverage for basic health care but failed to insure against substantial in-patient hospitalization, for instance.

How likely is this? "Sixty votes could be hard," Wojcik said. "If they want to make those changes, they'll probably have to use the reconciliation process. But they could do it. There is a budget implication for eliminating the employer and individual mandates, as well as some of the taxes that were part of the ACA. I think it's doable as a result of the election."

The 40-percent excise tax on employer-sponsored health coverage that exceeds certain benefit thresholds, set to take effect in 2020, "is perhaps in a category by itself since there is widespread bipartisan support for eliminating it," Wojcik said. "Employers as well as unions and others oppose this tax as a flawed way to hold down health plan costs. Ultimately, it will just raise the cost of employer-sponsored coverage without attacking the problem, which is the continued growth in health care expenses beyond wage growth and growth of the overall economy."

"Donald Trump is very supportive of these proposed changes and [House Speaker Paul Ryan's] blueprint for health reform included them as well," said Wojcik.

To address the rising cost of health care, which remains "the big issue for employers," Wojcik said, the Trump administration may support applying more broadly some of the payment and delivery reforms that have been initiated in Medicare as part of the ACA. "We're hoping that those continue and expand to compliment what's happening in the private sector, to move away from fee-for-service and to move to alternatives"—such as a comprehensive primary-care payment model—"that promise more effective and efficient care."

Speaker Ryan's health care blueprint, spelled out in a 37-page "A Better Way" issue brief released in June, lays out "what [the GOP House] is going to try to enact in stages, changing certain parts of the ACA, such as eliminating the employer and individual mandates, eliminating the Cadillac and other taxes, and reducing the administrative requirements on employer plans," Wojcik said. "They're going to be taking these piece by piece, step by step. The days of trying to repeal everything wholesale are probably going to be over," despite what GOP congressional leaders are saying in the immediate aftermath of the election.

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