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September 26, 2017
On September 13, 2017, Senate Republicans introduced a bill (referred to as The Graham-Cassidy bill) to try, one more time, to repeal and replace portions of the ACA. The bill contains many of the provisions included in legislation proposed earlier this year. In fact, it was originally designed to be an amendment to prior legislation that was proposed in the Senate. This bill introduces a system that changes current federal spending on a number of ACA programs to block grants to states. Beginning in 2019, federal expenditures for ACA premium tax credits, cost-sharing reductions, Medicaid expansion, and the Basic Health Plan Program would be redirected to states through a funding formula based principally on state demographics.
As in earlier summaries, we will focus primarily on issues that affect employer sponsored benefits. However, we have provided an overview of the bill’s principal non-employer related provisions below.
Employer Plan–Related Provisions
Of great interest to applicable large employers is that the Graham-Cassidy bill effectively repeals the employer mandate and associated penalties retroactive to 2016. This has been a provision that has been included in almost all the legislation proposed this year.
Other Employer-Related Changes
Additional Flexibility for States to Make Changes to Individual and Small Group Rules
The bill provides a path for states to obtain waivers that could allow for significant changes to insurance rules. These state insurance rules would principally affect individual and small group health insurance plans.
Other Important Changes Less Related to Employer Plans
The bill also includes the following provisions:
Not Much Time Left to Pass the Legislation
Notably, this legislation must be passed by the Senate no later than September 30. That is the date on which the current budget reconciliation authority expires. The budget reconciliation process allows Republicans to pass legislation with only 51 votes instead of the 60 that are normally required to move legislation forward in the Senate. If the bill passes the Senate, it will then need to be reconciled with the American Health Care Act (ACHA) passed by the House earlier this year before it can be signed into law.
As always, should you have any questions, please contact your Parker, Smith & Feek Benefits Team.
The views and opinions expressed within are those of the author(s) and do not necessarily reflect the official policy or position of Parker, Smith & Feek. While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it.