Breaking: House Passes Obamacare Repeal & Replace
- Pre-Exissting Conditions Covered: Under the Affordable Care Act, insurance companies are required to cover pre-existing conditions. This is still the case under the AHCA, but the creation of High Risk Pools, funded with $8 billion dollars was an added amendment to the AHCA. Pools provide coverage if you have been locked out of the individual insurance market because of a pre-existing condition, and are subsidized by a state government. The premium is up to twice as much as individual coverage. Individuals who have a lapse in coverage of more than 63 days will be required to pay a 30 percent premium surcharge for 12 months when coverage is purchased.
- Adult Coverage to Age 26 Covered: People who are under 26 years old can stay on their parents’ health insurance plan under both the ACA and the AHCA.
- No Lifetime Cap: People who are under 26 years old can stay on their parents’ health insurance plan under both the ACA and the AHCA.
- “Pay or Play”: Penalties for noncompliance with the “pay or play” coverage requirement (which mandates, in general, that employers with 50+ FT
employees [including full-time equivalent employees] must offer affordable, minimum value coverage to their full-time employees, or pay a penalty tax) are zeroed out. However, the Form 1094 & 1095 reporting requirements are unchanged by the bill.
- Individual Mandate: Penalties for noncompliance with the individual mandate are zeroed out, effectively repealing the mandate. In its place, the bill requires issuers in the individual or small group markets to impose a 30% penalty on the health insurance premiums of individuals who do not maintain continuous health insurance coverage.
- Essential Health Benefits: AHCA eliminates the requirement for Essential Health Benefits. The AHCA allows limited policies that are only in case of major illness or injury.
- HSA Contribution Limits: Limits on contributions to health savings accounts (HSAs) are increased to equal the inflation-adjusted annual out-of-pocket expenses limitation imposed on high deductible health plans (currently $6,550 (self-only coverage)/$13,100 (family coverage)).
- Health FSA Contribution Limits: Limits on contributions to health flexible spending arrangements (health FSAs) are eliminated.
- Tax Credits for Individual Coverage: Replaces the ACA’s premium tax credits for individual market coverage with advanceable, refundable tax credits adjusted for both age and income.
- Market Reforms: Permits states to seek waivers from the ACA’s essential health benefits and age and health status community rating requirements.
- Medicaid: Allows states to elect to receive federal Medicaid funding via a block grant or per capita allotment, and alters the ACA’s Medicaid expansion.
The chart below summarizes some of the significant changes made by the AHCA.
Affordable Care Act (ACA)
American Health Care Act (AHCA)
Premium Age Differences
Health Savings Account Limits
Essential Health Benefits
The following chart summarizes the changes made to the AHCA by the MacArthur amendment.
|Insurance Market Provisions|
The MacArthur amendment:
|Limited Waiver Option||States may obtain waivers from certain federal standards, in the interest of lowering premiums and expanding the number of enrollees. States could seek waivers from:|
|Limited Waiver Requirements||States must explain how the waiver will benefit the insurance market in their state, such as reducing average premiums, increasing enrollment, stabilizing premiums for individuals with pre-existing conditions, or increasing the choice of health plans.,Applications are automatically approved within 60 days unless denied by HHS.|
As always, please contact us firstname.lastname@example.org for a compliance review of your benefits offering. Click here to read the American Health Care Act in its entirety.