House GOP Offers ACA Reform Plan, Focusing On The Individual Insurance Market, Leaving Key Questions Unanswered

February 17, 2017

This week, House Republican leaders released a policy brief that lays out their high-level plan to repeal and replace portions of the Affordable Care Act beginning with a 2017 budget reconciliation bill that reportedly will be released the week of February 20th.  Although the policy brief calls for repealing a number of ACA taxes and zeroing out the employer penalty, it does not mention the Cadillac Tax nor most of the problematic provisions affecting self-insured employers.  Importantly, it also does not mention any limitations on existing tax preferences for employment-based health care, an issue on which Republicans are divided and about which the business community is concerned.  GOP leaders presented the brief and a menu of reform options at a closed-door session with House Republicans, but a lack of consensus was apparent after the meeting.  Rep. Bill Flores (R-TX) said, "You've got to look at the imbalance between the way employers can buy health care coverage and the way families buy health care coverage.  Those disparate [tax] treatments need to be broken down and equalized."  Rep. Pete Sessions (R-TX) said he is concerned about the idea of limiting the tax exclusion on employer-provided health benefits.  "Capping the exclusion to me is like a Cadillac tax," he said.  There is at least one item of note in the Republican plan of interest to employers: it calls for increasing the amount that can be put into health savings accounts and allows HSA's to be used for over-the-counter health care items.  It should be noted the policy brief focuses on health care reforms that can be passed through the budget reconciliation process, which requires a simple majority in the Senate, and this is just the first step in the repeal and replace process, with numerous other issues yet to be addressed that will require at least 60 votes in the Senate.  The Association will be carefully monitoring ACA reform developments and will provide a complete update at the CHRO Summit.  In addition, on March 2nd, HR Policy Vice President Mark Wilson will join with speakers from other business groups in a bipartisan briefing on Capitol Hill on the need to protect employer-sponsored health care (including tax preferences) in the ongoing debate. We encourage you to have your company represented at that meeting