The Effects of Ending the Affordable Care Act’s Cost-Sharing Reduction Payments

Take a look at this interesting article by Kaiser Family Foundation and see how the cost-sharing mandate under the ACA will be affected in the AHCA.

Controversy has emerged recently over federal payments to insurers under the Affordable Care Act (ACA) related to cost-sharing reductions for low-income enrollees in the ACA’s marketplaces.

The ACA requires insurers to offer plans with reduced patient cost-sharing (e.g., deductibles and copays) to marketplace enrollees with incomes 100-250% of the poverty level. The reduced cost-sharing is only available in silver-level plans, and the premiums are the same as standard silver plans.

To compensate for the added cost to insurers of the reduced cost-sharing, the federal governments makes payments directly to insurance companies. The Congressional Budget Office (CBO) estimates the cost of these payments at $7 billion in fiscal year 2017, rising to $10 billion in 2018 and $16 billion by 2027.

The U.S. House of Representatives sued the Secretary of the U.S. Department of Health and Human Services under the Obama Administration, challenging the legality of making the cost-sharing reduction (CSR) payments without an explicit appropriation. A district court judge has ruled in favor of the House, but the ruling was appealed by the Secretary and the payments were permitted to continue pending the appeal. The case is currently in abeyance, with status reports required every three months, starting May 22, 2017.

If the CSR payments end – either through a court order or through a unilateral decision by the Trump Administration, assuming the payments are not explicitly authorized in an appropriation by Congress – insurers would face significant revenue shortfalls this year and next.

Many insurers might react to the end of subsidy payments by exiting the ACA marketplaces. If insurers choose to remain in the marketplaces, they would need to raise premiums to offset the loss of the payments.

We have previously estimated that insurers would need to raise silver premiums by about 19% on average to compensate for the loss of CSR payments. Our assumption is that insurers would only increase silver premiums (if allowed to do so by regulators), since those are the only plans where cost-sharing reductions are available. The premium increases would be higher in states that have not expanded Medicaid (and lower in states that have), since there are a large number of marketplace enrollees in those states with incomes 100-138% of poverty who qualify for the largest cost-sharing reductions.

There would be a significant amount of uncertainty for insurers in setting premiums to offset the cost of cost-sharing reductions. For example, they would need to anticipate what share of enrollees in silver plans would be receiving reduced cost-sharing and at what level. Under a worst case scenario – where only people eligible for sharing reductions enrolled in silver plans – the required premium increase would be higher than 19%, and many insurers might request bigger rate hikes.

While the federal government would save money by not making CSR payments, it would face increased costs for tax credits that subsidize premiums for marketplace enrollees with incomes 100-400% of the poverty level.

The ACA’s premium tax credits are based on the premium for a benchmark plan in each area: the second-lowest-cost silver plan in the marketplace. The tax credit is calculated as the difference between the premium for that benchmark plan and a premium cap calculated as a percent of the enrollee’s household income (ranging from 2.04% at 100% of the poverty level to 9.69% at 400% of the poverty in 2017).

Any systematic increase in premiums for silver marketplace plans (including the benchmark plan) would increase the size of premium tax credits. The increased tax credits would completely cover the increased premium for subsidized enrollees covered through the benchmark plan and cushion the effect for enrollees signed up for more expensive silver plans. Enrollees who apply their tax credits to other tiers of plans (i.e., bronze, gold, and platinum) would also receive increased premium tax credits even though they do not qualify for reduced cost-sharing and the underlying premiums in their plans might not increase at all.

We estimate that the increased cost to the federal government of higher premium tax credits would actually be 23% more than the savings from eliminating cost-sharing reduction payments. For fiscal year 2018, that would result in a net increase in federal costs of $2.3 billion. Extrapolating to the 10-year budget window (2018-2027) using CBO’s projection of CSR payments, the federal government would end up spending $31 billion more if the payments end.

This assumes that insurers would be willing to stay in the market if CSR payments are eliminated.

Methods

We previously estimated that the increase in silver premiums necessary to offset the elimination of CSR payments would be 19%.

To estimate the average increase in premium tax credits per enrollee, we applied that premium increase to the average premium for the second-lowest-cost silver plan in 2017. The Department of Health and Human Services reports that the average monthly premium for the lowest-cost silver plan in 2017 is $433. Our analysis of premium data shows that the second-lowest-cost silver plan has a premium 4% higher than average than the lowest-cost silver plan.

We applied our estimate of the average premium tax credit increase to the estimated total number of people receiving tax credits in 2017. This is based on the 10.1 million people who selected a plan during open enrollment and qualified for a tax credit, reduced by about 17% to reflect the difference between reported plan selections in 2016 and effectuated enrollment in June of 2016.

We believe the resulting 23% increase in federal costs is an underestimate. To the extent some people not receiving cost-sharing reductions migrate out of silver plans, the required premium increase to offset the loss of CSR payments would be higher. Selective exits by insurers (e.g., among those offering lower cost plans) could also drive benchmark premiums higher. In addition, higher silver premiums would somewhat increase the number of people receiving tax credits because currently some younger/higher-income people with incomes under 400% of the poverty level receive a tax credit of zero because their premium cap is lower than the premium for the second-lowest-cost silver plan. We have not accounted for any of these factors.

Our analysis produces results similar to recent estimates for California by Covered California and a January 2016 analysis from the Urban Institute.

See the original article Here.

Source:

Levitt L., Cox C., Claxton G., (2017 April 25). The effects of ending the affordable care act's cost-sharing reduction payments[Web blog post]. Retrieved from address http://www.kff.org/health-reform/issue-brief/the-effects-of-ending-the-affordable-care-acts-cost-sharing-reduction-payments/


Why Private Exchanges Haven't Taken Off As Predicted

Great article from our partner, United Benefit Advisors (UBA) by Paul Rooney.

While the health care affordability crisis has become so significant, questions still linger—will private exchanges become a viable solution for employers and payers, and will they will continue to grow? Back in 2015, Accenture estimated that 40 million people would be enrolled in private exchange programs by 2018; the way we see this model’s growth today doesn’t speak to that. So, what is preventing them from taking off as they were initially predicted? We rounded up a few reasons why the private exchange model’s growth may be delayed, or coming to a halt.

They Are Not Easy to Deploy

There is a reason why customized benefits technology was the talk of the town over the last two years; it takes very little work up-front to customize your onboarding process. Alternatively, private exchange programs don’t hold the same reputation. The online platform selection, build, and test alone can get you three to six months into the weeds. Underwriting, which includes an analysis of the population’s demographics, family content, claims history, industry, and geographic location, will need to take place before obtaining plan pricing if you are a company of a certain size. Moreover, employee education can make up a significant time cost, as a lack of understanding and too many options can lead to an inevitable resistance to changing health plans. Using a broker, or an advisor, for this transition will prove a valuable asset should you choose to go this route.

A Lack of Education and a Relative Unfamiliarity Revolves Around Private Exchanges

Employers would rather spend their time running their businesses than understanding the distinctions between defined contribution and defined benefits models, let alone the true value proposition of private exchanges. With the ever-changing political landscape, employers are met with an additional challenge and are understandably concerned about the tax and legal implications of making these potential changes. They also worry that, because private exchanges are so new, they haven’t undergone proper testing to determine their ability to succeed, and early adoption of this model has yet to secure a favorable cost-benefit analysis that would encourage employers to convert to this new program.

They May Not Be Addressing All Key Employer and Payer Concerns

We see four key concerns stemming from employers and payers:

  • Maintaining competitive benefits: Exceptional benefits have become a popular way for employers to differentiate themselves in recruiting and retaining top talent. What’s the irony? More options to choose from across providers and plans means employees lose access to group rates and can ultimately pay more, making certain benefits less. As millennials make up more of today’s workforce and continue to redefine the value they put behind benefits, many employers fear they’ll lose their competitive advantage with private exchanges when looking to recruit and retain new team members.
  • Inexperienced private exchange administrators: Because many organizations have limited experience with private exchanges, they need an expert who can provide expertise and customer support for both them and their employees. Some administrators may not be up to snuff with what their employees need and expect.
  • Margin compression: In the eyes of informed payers, multi-carrier exchanges not only commoditize health coverage, but perpetuate a concern that they could lead to higher fees. Furthermore, payers may have to go as far as pitching in for an individual brokerage commission on what was formerly a group sale.
  • Disintermediation: Private exchanges essentially remove payer influence over employers. Bargaining power shifts from payers to employers and transfers a majority of the financial burden from these decisions back onto the payer.

It Potentially Serves as Only a Temporary Solution to Rising Health Care Costs

Although private exchanges help employers limit what they pay for health benefits, they have yet to be linked to controlling health care costs. Some experts argue that the increased bargaining power of employers forces insurers to be more competitive with their pricing, but there is a reduced incentive for employers to ask for those lower prices when providing multiple plans to payers. Instead, payers are left with the decision to educate themselves on the value of each plan. With premiums for family coverage continuing to rise year-over-year—faster than inflation, according to Forbes back in 2015—it seems private exchanges may only be a band-aid to an increasingly worrisome health care landscape.

Thus, at the end of it all, change is hard. Shifting payers’, employers’, and ultimately the market’s perspective on the projected long-term success of private exchanges will be difficult. But, if the market is essentially rejecting the model, shouldn’t we be paying attention?

See the original article Here.

Source:

Rooney P. (2017 April 26). Why private exchanges haven't taken off as predicted [Web blog post]. Retrieved from address http://blog.ubabenefits.com/why-private-exchanges-havent-taken-off-as-predicted


Poll: Majority Sees GOP Health Bill as Step Backward

Have you wondered how other Americans feel about the repealing of the ACA? Check out in this great article by Jonathan Easley from The Hill about a poll taken from Harvard detailing how people across the country really feel about the passing of the AHCA.

A majority of voters see the GOP healthcare bill as a step backward and want to see the Senate make significant changes to it.

According to data from the latest Harvard-Harris Poll survey, provided exclusively to The Hill, 55 percent view the House-passed bill as a step backward, compared to 45 percent who described it as a step forward.

Seventy-seven percent of Republicans view the bill as a step forward, while 77 percent of Democrats and 61 percent of independents view it as a step back.

Fifty-seven percent of voters said they want to see the Senate make significant changes to the bill if it is to be passed into law, including 64 percent of Republicans and 66 percent of independents.

Sixty percent of voters want the Senate bill to ensure people with preexisting conditions can get affordable healthcare.

An amendment to the House bill offers state waivers that would allow carriers to charge people more based on their health.

“The voters want to neither go back to ObamaCare nor to the House bill,” said Harvard-Harris co-director Mark Penn.

“The Senate is going to have to thread the needle here and craft a new compromise. The voters are mostly concerned with pre-existing conditions and are against any penalty for not having insurance. Solve the preconditions dilemma and they might have something that could get public support.”

The Harvard-Harris online survey of 2,006 registered voters was conducted May 17–20. The partisan breakdown is 36 percent Democrat, 32 percent Republican, 29 percent independent and 3 percent other. The poll uses a methodology that doesn't produce a traditional margin of error.

The Harvard–Harris Poll is a collaboration of the Harvard Center for American Political Studies and The Harris Poll. The Hill will be working with Harvard-Harris throughout 2017. Full poll results will be posted online later this week.

Satisfaction with the bill cut sharply along partisan lines.

See the original article Here.

Source:

Easley J. (2017 May 24). Poll: majority sees GOP health bill as step backward[Web blog post]. Retrieved from address http://thehill.com/policy/healthcare/335003-poll-majority-sees-gop-health-bill-as-step-backward


An Update on Health Care and Tax Reform

Make sure you are staying up-to-date with all the recent changes happening in healthcare. Here is a great article by Joseph Minarik from the Committee for Economic Development to help you stay informed with everything going on with the new healthcare legislation.

The status of what may be the Administration’s two highest legislative priorities, health care reform and tax reform, remains uncertain.

The overwhelming consensus in Washington is that the Administration and the Congress have virtually no alternative but to either complete or abandon health care reform before taking up tax reform. That is because both an Administration health care reform (to “repeal and replace” Obamacare, more formally known as the Affordable Care Act, or ACA), and any Administration tax reform, can be enacted only under reconciliation procedures in the Senate (which prevent a filibuster that would require 60 votes to break). By budget process rules, there can be only one reconciliation process in progress at one time. The current process was designed expressly for health care reform. The health care reform process cannot continue if tax reform is begun.

A decision to abandon health care reform would be extremely painful to the many Republicans in Congress who made repealing Obamacare their signature campaign promise. This would certainly be an admission of failure in the current environment, with Republicans controlling the White House and both chambers of the Congress. But that delays and reduces the time available to complete any attempted tax reform. Of course, the relevant policy players can have tax reform conversations among themselves, but that is not the same as actually engaging in a public debate over actual legislative language.

So the current debate over health care legislation is time-sensitive. And passing the House health care bill, the American Health Care Act (AHCA), was extraordinarily difficult. The Senate cannot pass the AHCA, and their passing any similar bill would likely be even more difficult than was the process in the House.

To begin, Democrats will provide zero votes to “repeal” what they hold as the signature achievement of the Obama Administration. Republicans have 52 votes in the Senate, and thus, even under the reconciliation procedure, can afford to lose only two votes. (The Vice President would be called on to break a 50-50 tie.) Thus, the Senate Republicans’ margin for error is extremely small, and the ideological spread of their membership is probably wider than is that of their caucus on the House side.

And under these daunting arithmetic constraints, the Senate health bill must thread several very small substantive needles.

The bill will be under very tight fiscal constraints. The Republicans want the health bill to reduce the deficit, so that the money it saves can be used to pay for tax reform. This is expected even after the repeal of many of the taxes and fees and some of the spending cuts that Obamacare used to finance itself.

The programmatic expectations on the bill will be considerable. Opinion surveys showed “Obamacare” to be highly unpopular. But when not identified with the bill, many of Obamacare’s key features were found to be resoundingly popular – even among Republicans, and even in the very same surveys. One such feature was eliminating discrimination against persons with pre-existing conditions. At the same time, one of the highest House Republican priorities was reducing premiums. The House Republicans could find no alternative way to reduce premiums but to water down the protections for those with pre-existing conditions, in some instances through provisions that were less than totally transparent. The Senate Republicans are likely to be less accepting of such provisions.

The House Republican AHCA sought to attract younger, healthier households to purchase insurance (without the mandate that their Members abhor) by raising the relative premiums of older enrollees. That is unlikely to sit well in the Senate – or at least well enough with a margin of only two votes.

Next on what could be a very long list of concerns is the repeal of Obamacare’s Medicaid expansion. There are 20 Republican Senators who represent states that have expanded Obamacare. As much as some Republicans opposed the Medicaid expansion, the same Senators are unwilling to impose a sudden reduction in their states’ federal funding to repeal it. Many of those Republicans also do not want to remove health care coverage from the working families who were covered by the expansion.

In the broadest terms, Republican Senators will not want to take away a benefit that has been given to the citizens of their states – even though those Senators may have on a principled basis opposed granting that benefit in the first place. But achieving everything that they want to achieve in this bill, subject to a rigorous budget constraint, may prove impossible.

And then, assuming the Senate manages to pass a bill, it will then have to reconcile its very different bill with that of the House. It is always possible that many House and Senate Republicans will decide to sacrifice their preferences to that the Administration can have its first-year victory to set a positive tone (and avoid a highly negative one). But the first instinct of a Member of Congress is almost always self-preservation, and the fondest hope and expectation is that the next election will see the triumph of his or her ideological view and thus the ability to achieve all of the goals that cannot be obtained in the present because of the service of doctrinal purity.

Whether health care reform succeeds or not, the President and the Congress are sure to find that tax reform is every bit as complex as is health care reform. Again, they will begin with the tightest budget constraint, along with a lengthy list of priorities. They already have discussed tax cuts for large businesses and small businesses, public corporations and LLCs, and of course a massive tax cut for the middle class. How all of that happens without widening the already excessive and growing budget deficit is a true puzzle. At present, the House Ways & Means Committee chair continues to maintain that he will put forward a revenue-neutral bill by relying on the so-called “border-adjustment tax” which CED has discussed in a recent policy brief, and which has proven highly unpopular in the Senate. This makes the prospects even more murky.

If all of this fails, which it may or may not, the Administration and the Congress will find themselves at the end of the year with no particular legislative achievement. There is some possibility that they would respond to that conundrum by following the path of least resistance and proposing a large net tax cut, forcing the political opposition to vote against it and thus cross many taxpayers. But that, of course, would worsen the already troubling budget outlook.

See the original article Here.

Source:

Minarik J. (2017 May 17). An update on health care and tax reform [Web blog post]. Retrieved from address https://www.ced.org/blog/entry/an-update-on-health-care-and-tax-reform


Health Reform Expert: Here’s What HR Needs to Know About GOP Repeal Bill Passing

The House of Repersentives has just passed the American Health Care Act (AHCA), new legislation to begin the repeal process of the ACA. Check out this great article from HR Morning and take a look how this new legislation will affect HR by Jared Bilski.

Virtually every major news outlet is covering the passage of the American Health Care Act (AHCA) by the House. But amidst all the coverage, it’s tough to find an answer to a question that’s near and dear to HR: What does this GOP victory mean for employers? 

The AHCA bill, which passed in the House with 217 votes, is extremely close to the original version of the legislation that was introduced in March but pulled just before a vote could take place due to lack of support.

While the so-called “repeal-and-replace” bill would kill many of the ACA’s taxes (except the Cadillac Tax), much of the popular health-related provisions of Obamacare would remain intact.

Pre-existing conditions, essential benefits

However, the new bill does allow states to waive certain key requirements under the ACA. One of the major amendments centers on pre-existing conditions.

Under the ACA, health plans can’t base premium rates on health status factors, or pre-existing conditions; premiums had to be based on coverage tier, community rating, age (as long as the rates don’t vary by more than 3 to 1) and tobacco use. In other words, plans can’t charge participants with pre-existing conditions more than “healthy” individuals are charged.

Under the AHCA, individual states can apply for waivers to be exempt from this ACA provision and base premiums on health status factors.

Bottom line: Under this version of the AHCA, insurers would still be required to cover individuals with pre-existing conditions — but they’d be allowed to charge astronomical amounts for coverage.

To compensate for the individuals with prior health conditions who may not be able to afford insurance, applying states would have to establish high-risk pools that are federally funded. Critics argue these pools won’t be able to offer nearly as much coverage for individuals as the ACA did.

Under the AHCA, states could also apply for a waiver to receive an exemption — dubbed the “MacArthur amendment” — to ACA requirement on essential health benefits and create their own definition of these benefits.

Implications for HR

So what does all this mean for HR pros? HR Morning spoke to healthcare reform implementation and employee benefits attorney Garrett Fenton of Miller & Chevalier and asked him what’s next for the AHCA as well as what employers should do in response. Here’s a sampling of the Q&A:

HR Morning: What’s next for the AHCA?
Garrett Fenton: The Senate, which largely has stayed out of the ACA repeal and replacement process until now, will begin its process to develop, amend, and ultimately vote on a bill … many Republican Senators have publicly voiced concerns, and even opposition, to the version of the AHCA that passed the House.

One major bone of contention – even within the GOP – was that the House passed the bill without waiting for a forthcoming updated report from the Congressional Budget Office.  That report will take into account the latest amendments to the AHCA, and provide estimates of the legislation’s cost to the federal government and impact on the number of uninsured individuals …

… assuming the Senate does not simply rubber stamp the House bill, but rather passes its own ACA repeal and replacement legislation, either the Senate’s bill will need to go back to the House for another vote, or the House and Senate will “conference,” reconcile the differences between their respective bills, and produce a compromise piece of legislation that both chambers will then vote on.

Ultimately the same bill will need to pass both the House and Senate before going to the President for his signature.  In light of the House’s struggles to advance the AHCA, and the razor-thin margin by which it ultimately passed, it appears that we’re still in for a long road ahead.

HR Morning: What should employers be doing now?
Garrett Fenton: At this point, employers would be well-advised to stay the course on ACA compliance. The House’s passage of the AHCA is merely the first step in the legislative process, with the bill likely to undergo significant changes and an uncertain future in the Senate. The last few months have taught us nothing if not the impossibility of predicting precisely how and when the Republicans’ ACA repeal and replacement effort ultimately will unfold.  To be sure, the AHCA would have a potentially significant impact on employer-sponsored coverage.

However, any employer efforts to implement large-scale changes in reliance on the AHCA certainly would be premature at this stage.  The ACA remains the law of the land for the time being, and there’s still a long way to go toward even a partial repeal and replacement.  Employers certainly should stay on top of the legislative developments, and in the meantime, be on the lookout for possible changes to the current guidance at the regulatory level.

HR Morning: Specifically, how should employers proceed with their ACA compliance obligations in light of the House passage of the AHCA?Garrett Fenton: Again, employers should stay the course for the time being, and not assume that the AHCA’s provisions impacting employer-sponsored plans ultimately will be enacted.  The ACA remains the law of the land for now.  However, a number of ACA-related changes are likely to be made at the regulatory and “sub-regulatory” level – regardless of the legislative repeal and replacement efforts – thereby underscoring the importance of staying on top of the ever-changing guidance and landscape under the Trump administration.

Fenton also touched on how the “MacArthur amendment” and the direct impact it could have on employers by stating it:

“… could impact large group and self-funded employer plans, which separately are prohibited from imposing annual and lifetime dollar limits on those same essential health benefits.  So in theory, for example, a large group or self-funded employer plan might be able to use a “waiver” state’s definition of essential health benefits – which could be significantly more limited than the current federal definition, and exclude items like maternity, mental health, or substance abuse coverage – for purposes of the annual and lifetime limit rules.  Employers thus effectively could be permitted to begin imposing dollar caps on certain benefits that currently would be prohibited under the ACA.”

See the original article Here.

Source:

Bilski J. (2017 May 5). Health reform expert: here's what HR needs to know about GOP repeal bill passing [Web blog post]. Retrieved from address http://www.hrmorning.com/health-reform-expert-heres-what-hr-needs-to-know-about-gop-repeal-bill-passing/


Here’s What You Need to Know About Preexisting Conditions in the GOP Health Plan

Has the repeal of the ACA left you worried about all the changes potential coming to your healthcare? Take a look at this article by Glenn Kessler from the Washington Posts and find out what AHCA means for you and your healthcare.

With House Republicans prepared to take a vote Thursday on yet another version of a plan to overhaul the 2010 Affordable Care Act, attention has been especially focused on whether Obamacare’s popular prohibition against denying coverage based on preexisting medical conditions will remain in place. Republicans, from President Trump to lawmakers pushing for the bill, insist that it remains intact, just in different form. Democrats and opponents of the bill say the guarantee is gone or greatly weakened.

The reality is more nuanced and complicated, as is often the case in Washington policy debates. Despite Ryan’s tweet that people with preexisting conditions are protected, there is no guarantee that they will not face higher costs than under current law. The impact of recent tweaks to the proposed legislation is especially unclear because lawmakers are rushing ahead without an assessment by the nonpartisan Congressional Budget Office. So here’s The Fact Checker’s guide to the debate.

What’s the issue?

Before the Affordable Care Act, insurance companies could consider a person’s health status when determining premiums, sometimes making coverage unaffordable or even unavailable if a person was already sick with a problem that required expensive treatment. The ACA prohibited that, in part by requiring everyone to purchase insurance.

But that “individual mandate” was unpopular and Republicans would eliminate that requirement in their proposed American Health Care Act. As a replacement, the AHCA initially included a continuous coverage provision that boosted insurance rates by 30 percent for one year if he or she has a lapse in coverage. (We explored this interaction between the provisions earlier.)

As part of an effort to attract more votes, Republicans have added an amendment, crafted by Rep. Tom McArthur (R-N.J.), that instead allows states to seek individual waivers from the law. One possible waiver would replace the continuous coverage provision so that insurance companies for one year could consider a person’s health status when writing policies in the individual market. Another possible waiver would allow the state to replace a federal essential benefits package with a more narrowly tailored package of benefits, again limited to the individual and small-group markets.

The theory is that removing sicker people from the markets and allowing policies with skimpier options would result in lower overall premiums.

Who would be affected?

If the law passed, a person generally would not be affected unless they lived in a state that sought a waiver. Moreover, they would need to have a lapse in health coverage for longer than 63 days and they would need to have a preexisting condition. Finally, they would have to purchase insurance in the individual market – such as the health exchanges in Obamacare – that currently serves about 18 million Americans.

Someone who got their insurance from an employer – and that’s about half of Americans under 65 (155 million) – presumably would not be affected, though the CBO did project that under the initial version of the AHCA 7 million fewer people would be covered by employers than under current law by 2026.

Then, for a period of one year, a person who fell into this category would face insurance rates that could be based on their individual condition. But states that seek a waiver are required to operate a risk mitigation program or participate in what is called an invisible risk sharing program. Alaska currently has such a program that helps cover the bills for one of 33 conditions (such as HIV/AIDS or metastatic cancer). The individual with the condition still submits bills to the insurance company, which then turns around and bills the state. But then the insurance company does not consider the cost of this care as part of its calculation for premiums to other individuals in the state.

All told, the AHCA would allot $138 billion over 10 years for a variety of funds that would seek to keep premiums lower or to assist with cost-sharing. Just this week, $8 billion over five years was added to the pot to woo wavering lawmakers, with the idea that the additional funds could be used for so-called high-risk pools. Many states had such pools to help people with preexisting conditions before the ACA. But the proposal does not require a state with a waiver to set up such a pool.

What could go wrong then?

There are many uncertainties about this path. The health insurance market has a lot of churn, so many people may experience a gap in coverage of just a few months. One estimate, by the Commonwealth Fund, indicated that 30 million adults would have had such a gap in 2016, potentially exposing them to a surcharge or being placed in a high-risk pool. On top of that, the Kaiser Family Foundation estimated that 27 percent of the people in the individual market have existing conditions that would have been uninsured before the ACA.

The AHCA eliminates cost sharing and offers a stingier tax credit to defray premium costs, likely resulting in higher overall health costs that may make insurance unaffordable for many people. (The CBO projected that 24 million more people would be without health insurance than under current law by 2026.)

Then, if people get sick, they may suddenly find themselves for a year being priced on their illness if they live in a state that sought a waiver. Depending on the approach taken by a state, some people might find it difficult to keep up their coverage for a full year before they qualify for prices at the community rate.

A big question is whether the funding to cover these folks is adequate. High-risk pools were big money losers and underfunded in the pre-Obamacare days, even though many had restrictions, high premiums and waiting lists. A $5 billion federal pool, established by the ACA as a bridge to the creation of the exchanges in 2013, covered about 100,000 people but was suspended when it ran out of money.

The Center for American Progress, a left-leaning group that opposes the AHCA, produced an analysis that indicated that even with the additional $8 billion, the maximum enrollment the AHCA’s funds would cover is about 700,000 people. If just 5 percent of the people currently in the individual market ended up in high-risk pools – and all states sought a waiver – that would overwhelm the proposed funding.

Avalere Health, a consulting firm, said in an analysis that $23 billion is specifically allocated in the bill for helping people with pre-existing conditions. That would cover about 110,000 people. If states allocated all of the other available funding, that would cover 600,00 people. “Approximately 2.2 million enrollees in the individual market today have some form of pre-existing chronic condition,” the analysis said.

When states had high-risk pools, people in those pools represented just 2 percent of the non-group health insurance participants. But given the limitations of those funds, that percentage may not be a good guide for what would happen under the AHCA.

Whenever health-care laws are changed, there are unknown and unintended consequences. The current system does not take into account a person’s health status when assessing premiums. But, as a Brookings Institution analysis suggested, under the AHCA’s provisions, healthy people might have an incentive to join plans based on health status. That would leave sicker people in the community rated plans, which in turn would face higher premiums. Over time, that could make the community rating meaningless. (Update: The CBO in its revised report on the AHCA said this was quite possible for states representing about one-sixth of the U.S. population. We explored that in detail in this article.)

Another possible outcome: If the pool of money is used to pay insurance companies for the difference in costs for patients with preexisting conditions, there may be little incentive for companies to keep their prices low; the difference would be made up by U.S. taxpayers.

The Bottom Line

When it comes to health care, readers should be wary about claims that important changes in health-care coverage are without consequences and that people are “protected” – or that the changes will result in massive dislocation and turmoil. There are always winners and losers in a bill of this size. In this case, if the bill ever became law, much would depend on unknown policy decisions by individual states – and then how those decisions are implemented.

See the original article Here.

Source:

Kessler G. (2017 May 4). Here's what you need to know about preexisting conditions in the GOP health plan [Web blog post]. Retrieved from address https://www.washingtonpost.com/news/fact-checker/wp/2017/05/04/heres-what-you-need-to-know-about-pre-existing-conditions-in-the-gop-health-plan/?utm_term=.bb8de3169f20


10 Things to Know about Medicaid: Setting the Facts Straight

Do you need help understanding all the aspects of Medicaid? Check out this informative article by Julia Paradise from Kaiser Family Foundation about the 10 most important things you must know when dealing with Medicaid.

Medicaid, the nation’s public health insurance program for low-income children, adults, seniors, and people with disabilities, covers 1 in 5 Americans, including many with complex and costly needs for medical care and long-term services. Most people covered by Medicaid would be uninsured or underinsured without it. The Affordable Care Act (ACA) expanded Medicaid to reach low-income adults previously excluded from the program and provided federal funding to states for the vast majority of the cost of newly eligible adults.

President Trump and other GOP leaders have called for far-reaching changes to Medicaid, including caps on federal funding for the program. In the debate about Medicaid’s future, some critics of the program have made statements that are at odds with data, research, and basic information about Medicaid. To inform policy decisions that may have significant implications for Medicaid, the low-income people it serves, and the states, this brief highlights 10 key Medicaid facts.

1.    Medicaid is a cost-effective program, providing health coverage for low-income Americans at a lower per-person cost than private insurance could.

Some say that Medicaid costs too much. Total Medicaid costs are high because Medicaid covers many people with complex needs for both health care and long-term care. Most Medicaid spending is for seniors and people with disabilities (Figure 1). Analysis shows that when the greater health needs of Medicaid enrollees are adjusted, costs per enrollee are lower in Medicaid relative to private insurance; spending per enrollee would be 25% higher if adult Medicaid beneficiaries were instead covered by employer-based insurance, largely because private insurers generally pay providers more than states do. Growth in Medicaid acute care spending per enrollee has also been low relative to other health spending benchmarks, and federal data show that Medicaid has constrained per capita spending growth more than Medicare and private insurance. States have strong financial incentives to manage Medicaid closely and ensure program integrity because they must pay a large share of Medicaid costs and must also balance their budgets. The ACA provided increased funding and new tools for both federal and state Medicaid program integrity efforts, and states continue to strengthen their operations, using data analytics and predictive modeling, expanding their program integrity activities to managed care, and making other investments.

2.    Medicaid bolsters the private insurance market by acting as a high-risk pool.

Some say that private insurance could do a better job of covering low-income people than Medicaid. Actually, Medicaid was established to provide health coverage for many uninsured people who were excluded from the private, largely employment-based health insurance system because of low income, poor health status, or disability. Over time, federal and state expansions of Medicaid have resulted in historic reductions in the share of children without coverage and, in the states adopting the ACA Medicaid expansion, sharp declines in the share of adults without coverage. Nearly 8 in 10 nonelderly, non-disabled adults are in working families and a majority are working themselves, but many work in small firms and types of industries that tend to have limited or no job-based coverage options. Among adult Medicaid enrollees who are not working, illness or disability is the main reason. By covering many of the poorest and sickest Americans, Medicaid effectively serves as a high-risk pool for the private health insurance market, taking out the highest-cost people, thereby helping to keep private insurance premiums more affordable.

Medicaid also bolsters the private insurance system by providing supplemental coverage for many privately insured children with special needs and children and adults with disabilities. Medicaid pays for therapies, dental and vision care, and other medical and long-term services and supports needed by many of these individuals but typically not covered by private insurance.

3.    Federal Medicaid matching funds support states’ ability to meet changing coverage needs, such as during economic downturns and public health emergencies.

Some argue that federal funding for Medicaid should be capped to remove states’ incentives to spend more. The availability of federal matching funds with no pre-set limit does not mean that states have no incentives to constrain spending. On the contrary, because they must spend their own dollars to claim federal matching payments, and are required by their constitutions to balance their budgets, states have a strong interest in running efficient and effective programs. State cost-cutting measures taken in hard economic times have led to lean Medicaid operations, and state Medicaid programs have been leaders in health care delivery and payment reform designed to control costs and improve care. Over 2007-2013, average annual growth in Medicaid spending per enrollee was  less than growth in private health insurance premiums – 3.1% compared to 4.6%.

The guarantee of federal matching funds at least dollar for dollar enlarges states’ financial capacity to respond to changing coverage needs. Because federal funds flow to states based on actual needs and costs, Medicaid can respond if there is an economic downturn, or medical costs rise, or there is a public health emergency such as the opioid epidemic or a natural disaster such as Hurricane Katrina. Federal payments to states adjust automatically to reflect the increased costs of the program. Capped federal funding for Medicaid would reduce federal spending, but the burden of the reductions would fall on states. The levers that states have to manage with reduced federal Medicaid funding are cuts in Medicaid eligibility and benefits, which could limit their ability to meet the health needs of their residents, respond to recessionary pressures and emerging health issues, and provide access to new but costly health care technologies, including life-saving drugs, to Medicaid beneficiaries. Federal caps would also lock in states’ historical spending patterns, constraining their flexibility to respond to changing resources and priorities.

4.    Medicaid is a major spending item in state budgets, but also the largest source of federal funds for states.

Some say that Medicaid is crowding out state spending on education and other state priorities. Medicaid is a major item in state budgets, but it is also the single largest source of federal funds for states. In FY 2015, Medicaid accounted for more than half (57%) of all federal funds states received. The federal government matches state Medicaid spending at least dollar for dollar and pays more in poorer states, and states receive an enhanced federal match – 95% in 2017 – for Medicaid expansion adults. In FY 2015, Medicaid accounted for 28% of total state spending (i.e., including state spending of federal dollars), but less than 16% of state spending of state funds – a distant second to state funds spending on K-12 education (almost 25%).

An analysis examining economic and fiscal trends in Medicaid expansion and non-expansion states found that Medicaid expansion states, which typically raise more tax revenues as a share of total taxable resources than non-expansion states, spend more per capita on both Medicaid and K-12 education. Research shows that the injection of federal Medicaid matching funds into state economies has a multiplier effect, directly benefiting the health care providers that serve Medicaid beneficiaries, and also indirectly supporting other businesses and industries (e.g., vendors), producing increased state economic activity and output as the funds flow through the system. More recent analyses find positive effects of the Medicaid expansion on multiple economic outcomes in states, including budget savings, revenue gains, and overall economic growth.

5.    States have broad discretion in designing key aspects of their Medicaid programs.

Some say that Medicaid is federally controlled and inflexible, leaving states little room to shape their own programs. In fact, beyond federal minimum requirements for Medicaid, states have and use extensive flexibility and options to design key dimensions of their Medicaid programs. For example, they can and do elect to cover many optional services and optional groups. State Medicaid programs vary widely in terms of who is eligible, which services are covered, premiums and cost-sharing requirements, the delivery systems in which beneficiaries get care, and provider payment methods and rates. The different program design choices that states make, reflecting their particular needs, preferences, and priorities, are a large underlying factor in the wide variation in state Medicaid spending per enrollees (Figure 5). In 2011, Medicaid spending per full-benefit enrollee ranged from $4,010 in Nevada to $11,091 in Massachusetts. In addition to the flexibilities and optional state authorities provided by federal Medicaid law, states can obtain Section 1115 demonstration waivers that permit them to test and implement approaches that deviate from federal Medicaid rules if the HHS Secretary determines they advance program objectives. As of January 2017, 37 states had a total of 50 approved Section 1115 waivers.

6.    Medicaid beneficiaries have robust access to care overall, although access to certain types of specialists is an ongoing challenge for Medicaid and all payers.

Some say that access to care in Medicaid is lacking because 30% of physicians do not accept new Medicaid patients (about 70% do accept new Medicaid patients versus about 85% who accept new privately insured and Medicare patients). Taken alone, physician participation rates are a weak measure of access to care. A large body of research shows that Medicaid beneficiaries have far better access to care than the uninsured and are far less likely to postpone or go without needed care due to cost. Moreover, rates of access to care and satisfaction with care among Medicaid enrollees are comparable to rates for people with private insurance (Figure 6). Gaps in access to certain providers, especially psychiatrists, some specialists, and dentists, are ongoing challenges in Medicaid and often in the health system more broadly. Contributing factors include provider shortages, geographic maldistribution of health care providers, low Medicaid payment rates, and lack of transportation. Managed care plans, which now serve most Medicaid beneficiaries, are responsible under their contracts with states for ensuring adequate provider networks. There is no evidence that physician participation in Medicaid is declining. In a 2015 survey, 4 in 10 PCPs who accepted Medicaid reported seeing an increased number of Medicaid patients since January 2014, when the coverage expansions in the ACA took full effect. A recent analysis found no consistent evidence that increases in the share of adults with insurance at the local-area level affected access to care for adults in those areas who were already insured, including Medicaid beneficiaries.

7.    Medicaid keeps coverage and care affordable for low-income Americans.

Some say that Medicaid enrollees should pay more for their health care and have more “skin in the game” to restrain utilization. Federal law limits Medicaid premiums and cost-sharing to minimize financial barriers to coverage and care for low-income people: total out-of-pocket costs for a family are limited to 5% of the family’s income. Research shows that average spending greatly exceeds average income in low-income households, suggesting that these households accrue debt even as they earn. Therefore, even small amounts of spending on health care can crowd out other necessities or push low-income families further into debt. A family of three living at 138% FPL (the eligibility threshold for adults in Medicaid expansion states) has income of $28,180. Out-of-pocket costs totaling just 3% of their income – about $845 – would leave this family with less than $27,500 to pay for housing, utilities, food, clothing, transportation, school supplies, and other necessities. The same family living in one of the non-expansion states, where the median eligibility limit for parents is 44% FPL, would be left with about $8,700 to meet these basic costs.

Numerous studies have shown significant declines in enrollment in coverage after the implementation of new or higher premiums, as well as shorter spells of enrollment and reduced rates of renewal (Figure 7). Many who lose coverage become uninsured. Cost-sharing has been shown to lead to significant reductions in use of services, including essential and effective services like screenings and preventive care, prescription drugs, inpatient care, and other care key to health outcomes. Cost-sharing can have a particularly large impact on people with lower income and significant health care needs, as small copays add up quickly. Medicaid providers frequently report difficulty collecting cost-sharing, which effectively reduces their reimbursement; states do not collect much revenue from premiums, and state savings are largely attributable to decreased enrollment and reduced use of services – often, needed services. The Oregon Health Insurance Experiment (OHIE) showed that gaining Medicaid virtually eliminated catastrophic out-of-pocket medical spending among previously uninsured adults and reduced financial hardship. Federal action to reduce financial protections in

Medicaid would run counter to the empirical evidence that premiums and cost-sharing impede coverage and access to care, and preempt waiver initiatives underway in numerous states to further test these policies.

8.    Evidence of Medicaid’s impact on health outcomes is growing.

Some say that having Medicaid is worse than being uninsured. In fact, research shows consistently that Medicaid improves access to care for both children and adults with low income. Access to screening and preventive care in Medicaid translates into well-child care, earlier detection of health and developmental problems in children, and earlier diagnosis of cancer, diabetes, mental illness, and other chronic conditions in people of all ages. Access to primary care providers and specialists, prescription drugs, and other services improves the likelihood that Medicaid enrollees will get treatment for both their acute and chronic conditions. Expansions of Medicaid pregnant women and children have led to improved birth outcomes and child health, and there is growing evidence that Medicaid expansions to adults are associated with increased use of screening services and preventive care, prescription drugs, inpatient care, and other services key to improving health outcomes (Figure 8). The OHIE, which used a uniquely rigorous study design, found that uninsured adults who gained Medicaid coverage through a state lottery reported improved self-rated mental health and had a 30% reduction in clinically observed rates of depression relative to the comparison group of adults who remained uninsured. Medicaid also increased diabetes detection and use of diabetes medication, though the effect on control of diabetes, hypertension, and high cholesterol was not statistically significant. Research has also found that Medicaid expansions for adults were associated with significant reductions in mortality. A new study shows meaningful impacts of the Medicaid expansion on mental health for low-income parents. Some Medicaid critics, citing a small sample of observational clinical studies, have asserted that Medicaid beneficiaries have worse outcomes than the uninsured. However, a group of distinguished health services researchers commenting in a leading medical journal wrote that these studies lack a causal model explaining the observed data and, outlining numerous analytic problems with the critics’ interpretation of the findings, effectively discredited their argument.

9.    Medicaid is the primary payer for long-term care for seniors and people with disabilities.

Some assume that Medicare, the federal health insurance program for seniors and people with disabilities, covers long-term care. In fact, Medicare coverage of long-term care is extremely limited. Medicaid is essentially the only public or private insurance program that covers long-term care. Six in 10 nursing home residents are covered by Medicaid, and Medicaid’s role in providing access to community-based long-term services and supports (LTSS) for both seniors and people with disabilities is hard to overstate. The program is the largest single source of payment for long-term care, financing half of total spending in this sector, including both nursing home care and home and community-based services (HCBS) (Figure 9). Over time, states have been working to rebalance their LTSS systems by devoting a greater percentage of their long-term care spending to HCBS relative to nursing home care, and Medicaid has been instrumental in expanding access to community-based LTSS, advancing efforts to increase community integration of seniors and individuals with disabilities.

In addition to covering LTSS, Medicaid also makes Medicare work for nearly 10 million poor Medicare beneficiaries (1 in 5 of all Medicare beneficiaries), known as “dual eligibles,” by helping with their Medicare premiums and out-of-pocket costs and covering vision and dental care and other benefits that Medicare does not cover. In the debate about the ACA Medicaid expansion to low-income adults, some have argued that state choices to adopt the expansion come at the cost of Medicaid’s neediest beneficiaries, but the research does not bear this out. A recent study found no evidence for the claim that Medicaid expansion leads to longer waiting lists for Medicaid HCBS waivers for seniors and people with disabilities. The study found that waiting lists for these waivers pre-date the ACA Medicaid expansion, and that there appears to be no relationship between a state’s Medicaid expansion status and changes in its HCBS waiver waiting list.

10. Medicaid is popular with the American public as well as with enrollees themselves.

Some say that Medicaid is a poor and broken program. The majority of Americans say that Medicaid is a very important program. More than half (56%) report that they, a child of theirs, or another family member or friend has been enrolled in Medicaid; the same percentage say that Medicaid is important for them and their family (Figure 10). Most Medicaid enrollees say the program is working well for the low-income people it covers and the vast majority feel well-protected financially. Focus group research has shown high levels of satisfaction with Medicaid among parents with children in the program. Two-thirds of Americans do not support caps on federal funding for Medicaid, the vast majority (84%) say that continuing federal funding for Medicaid expansion is important, and few (12%) want decreased federal spending on Medicaid.

See the original article Here.

Source:

Paradise J. (2017 May 9). 10 things to know about medicaid: setting the facts straight [Web blog post]. Retrieved from address http://www.kff.org/medicaid/issue-brief/10-things-to-know-about-medicaid-setting-the-facts-straight/

 


HR Pros Were Relieved When Obamacare Replacement Bill Got Pulled

Find out how HR professionals really felt about the fall of the AHCA in this great article from HR Morning by Tim Gould.

Everybody knows that the GOP’s attempt to repeal and replace Obamacare came to a rather ignominious end. But how did the HR community feel about that outcome?  

HR powerhouse Mercer addressed that question in a recent webcast, and the results were eye-opening.

Here are some stats from the webcast, which asked a couple key questions of 509 benefits pros.

On how they felt about the American Health Care Act being pulled:

  • Very relieved it didn’t pass — 24%
  • Relieved it didn’t pass — 32%
  • Very disappointed it didn’t pass — 5%
  • Disappointed it didn’t pass — 16%, and
  • No opinion — 23%.

So (utilizing our super-sharp math skills here) considerably more than half of the participants were not in favor of the AHCA, while just slightly more than one in five were disappointed it was shot down. Looks like Obamacare isn’t as deeply disliked as we’ve been led to believe — at least with benefits pros.

Mercer also asked participants to rate priorities for improving current healthcare law — using 5 as the top rating and 1 as the lowest. Those results:

  • Reduce pharmacy costs — 4.4
  • Improve price transparency for medical services/devices — 4.1
  • Stabilize individual market — 4.0
  • Maintain Medicaid funding — 4.0, and
  • Invest more in population health and health education — 3.7.

Perspective? As Beth Umland wrote on the Mercer blog, “Policymakers should view this health reform ‘reboot’ as an opportunity to partner with American businesses to drive higher quality, lower costs, and better outcomes for all Americans.”

A glance back

In case you’ve been hiding in a cave somewhere for the past several months, here’s a quick recap of the fate of the American Health Care Act.

Why did the AHCA fail, despite Republicans controlling the House, Senate and White House?

The answer starts with the fact that the GOP didn’t have the 60 seats in the Senate to avoid a filibuster by the Democrats. In other words, despite being the majority party, it didn’t have enough votes to pass a broad ACA repeal bill outright.

As a result, Senate Republicans had to use a process known as reconciliation to attempt to reshape the ACA. Reconciliation is a process that allows for the passage of budget bills with 51 votes instead of 60. So the GOP could vote on budgetary pieces of the health law, without giving the Democrats a chance to filibuster.

The problem for Republicans was reconciliation severely limited the extent to which they could reshape the law — and it’s a big reason the why American Health Care Act looked, at least to some, like “Obamacare Lite.”

Ultimately, what caused Trump and Ryan to decide to pull the bill before the House had a chance to vote on it was that so many House Republicans voiced displeasure with the bill and said they wouldn’t vote for it.

Specifically, here are some of what conservatives didn’t like about the American Health Care Act:

  • it largely left a lot of the ACA’s “entitlements” intact — like government aid for purchasing insurance
  • it didn’t do enough to curtail the ACA’s expansion of Medicaid
  • too many of the ACA’s insurance coverage mandates would remain in place
  • the Congressional Budget Office estimated that the bill would result in some 24 million Americans losing insurance within the next decade, and
  • it didn’t do enough to drive down the cost of insurance coverage in general.

See the original article Here.

Source:

Gould T. (2017 April 14). Hr pros were relieved when obamacare replacement bill got pulled Ob[Web blog post]. Retrieved from address http://www.hrmorning.com/hr-pros-were-relieved-when-obamacare-replacement-bill-got-pulled-off-the-table/


GOP Health Care Bill Would Cut About $765 Billion In Taxes Over 10 Years

The passing of the American Health Care Act means there will be a new taxes associated with healthcare. Find out in this article by Scott Horsley and see how this change in legislation will impact you.

The health care bill passed by the House on Thursday is a win for the wealthy, in terms of taxes.

While the Affordable Care Act raised taxes on the rich to subsidize health insurance for the poor, the repeal-and-replace bill passed by House Republicans would redistribute hundreds of billions of dollars in the opposite direction. It would deliver a sizable tax cut to the rich, while reducing government subsidies for Medicaid recipients and those buying coverage on the individual market.

Tax hikes reversed

The Affordable Care Act, also known as Obamacare, is funded in part through higher taxes on the rich, including a 3.8 percent tax on investment income and a 0.9 percent payroll tax. Both of these taxes apply only to people earning more than $200,000 (or couples making more than $250,000). The GOP replacement bill would eliminate these taxes, although the latest version leaves the payroll tax in place through 2023.

The House bill would also repeal the tax penalty for those who fail to buy insurance as well as various taxes on insurance companies, drug companies and medical device makers. The GOP bill also delays the so-called "Cadillac tax" on high-end insurance policies from 2020 to 2025.

All told, the bill would cut taxes by about $765 billion over the next decade.

The lion's share of the tax savings would go to the wealthy and very wealthy. According to the Tax Policy Center, the top 20 percent of earners would receive 64 percent of the savings and the top 1 percent of earners (those making more than $772,000 in 2022) would receive 40 percent of the savings.

Help for the poor reduced

Over time, the GOP bill would limit the federal contribution to Medicaid, while shifting control of the program to states. Depending on what happens to costs, states may be forced to provide skimpier coverage, reduce their Medicaid rolls, or both. The Congressional Budget Office estimated that an earlier version of the bill would leave about 14 million fewer people covered by Medicaid by 2026. (The House voted on the current bill without an updated CBO report.)

CBO also anticipated fewer people would buy insurance through the individual market. With no tax penalty for going without coverage, some people would voluntarily stop buying insurance. Others would find coverage prohibitively expensive, as a result of changing rules governing insurance pricing and subsidies.

The GOP bill would allow insurance companies to charge older customers up to five times more than younger customers — up from a maximum 3-to-1 ratio under the current health law. The maximum subsidy for older customers in the GOP plan, however, is only twice what is offered to the young.

The bill also allows insurance companies to offer more bare-bones policies. As a result, young, healthy people could find more affordable coverage options. But older, sicker people would likely have to pay more.

In addition, because the subsidies offered in the Republican plan don't vary with local insurance prices the way subsidies do in Obamacare, residents of high-cost, rural areas would also suffer. That could include a large number of Trump voters.

See the original article Here.

Source:

Horsley (2017 May 4). GOP health care bill would cut about $765 billion in taxes over 10 years [Web blog post]. Retrieved from address http://www.npr.org/2017/05/04/526923181/gop-health-care-bill-would-cut-about-765-billion-in-taxes-over-10-years


An Employer’s Guide to Navigating the ACA’s Strong Headwinds

Great article from our partner, United Benefit Advisors (UBA) by Michael Weiskirch.

One might describe the series of events leading to the death of the American Health Care Act (Congress’s bill to repeal and replace the Affordable Care Act) as something like a ballistic missile exploding at launch. The Patient Protection and Affordable Care Act (ACA) repeal debate began nearly a decade ago with former President Barack Obama’s first day in office and reemerged as a serious topic during the 2016 presidential election. Even following the retraction of the House bill, repeal of the ACA remains a possibility as the politicians consider alternatives to the recent bill. The possibility of pending legislation has caused some clients to question the need to complete their obligation for ACA reporting on a timely basis this year. The legislative process has produced a great deal of uncertainty which is one thing employers do not like, especially during the busy year end.

While the “repeal and replace” activity is continuing, it is imperative that employers and their brokers put their noses to the grindstone to fulfill all required reporting requirements. To accomplish this, employers will need brokers that can effectively guide them through this tumultuous season. We recommend that employers ask their brokers about their strategies for

  • Implementing the employer shared responsibility reporting
  • Sending all necessary forms to the employer’s employees
  • Submitting the employer’s reporting to the IRS
  • Closing out the employer’s 2016 filing season

Employers should also inquire about any additional support that the broker provides. They should provide many of the services that we at Health Cost Manager provide to our clients: They should apprise their clients of the latest legislative updates through regular email communication and informational webinars. Brokers should also bring in experts in the field that have interacted with key stakeholders in Washington. And most important, they should remain available during this uncertain period to answer any questions or concerns from clients.

We know employers would prefer not to have to comply with these reporting obligations – many have directly told us so. We understand this requires additional work on their part to gather information for the reporting and increased compliance responsibility. Knowing how stressful the reporting season can be for employers, brokers should go out of their way to help their clients feel confident that they can steer through the reporting process smoothly. The broker’s role should be to take as much of the burden off the employer’s shoulders as possible to enable them to reach compliance in the most expedient manner possible. Sometimes this involves stepping in to solve data or other technical issues, or answering a compliance-related question that helps the client make important decisions. It’s all part of helping employers navigate through the ACA’s strong headwinds during these uncertain times.

Audit-proof your company with UBA’s latest white paper: Don’t Roll the Dice on Department of Labor Audits. This free resource offers valuable information about how to prepare for an audit, the best way to acclimate staff to the audit process, and the most important elements of complying with requests.

See the original article Here.

Source:

Weiskirch M. (2017 April 13). An employer's guide to navigating the ACA's strong headwinds [Web blog post]. Retrieved from address http://blog.ubabenefits.com/an-employers-guide-to-navigating-the-acas-strong-headwinds