In a first step toward potentially repealing and replacing the Affordable Care Act (ACA), the U.S. House of Representatives passed the American Health Care Act on May 4, 2017. The bill will now be sent to the Senate. It is likely that the Senate will make changes to the proposed legislation before taking a vote.
Until this legislation is passed by the Senate and signed into law by President Trump, all existing ACA requirements remain in effect, including penalties for noncompliance.
Notable Provisions of the American Health Care Act
If the American Health Care Act is signed into law, here is an overview of some of the revisions that would be made to key features of the ACA:
- “Pay or Play”: Penalties for noncompliance with the “pay or play” coverage requirement (which mandates, in general, that employers with 50 or more full-time 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.
- 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.
- Market Reforms: Permits states to seek waivers from the ACA’s essential health benefits and age and health status community rating requirements.
Click here to read the American Health Care Act in its entirety.
Please stay tuned for additional information on how this Act progresses. If you have any questions in the meantime, please contact our team at 781-759-1222.