"Repeal and Replace" on Hold until Further Notice

The American Health Care Act (AHCA), the bill designed to "repeal and replace" various aspects of health care reform, was scheduled for a House floor vote last Friday, March 24, 2017. In a last minute decision caused by a lack of conservative and moderate Republican support, House leaders pulled the bill in its entirety that afternoon. What does that mean? And, what does the road ahead look like?

The AHCA would have reduced penalties under the Individual Mandate and the Employer Mandate to zero (retroactive to December 31, 2015), increased HSA contribution limits, removed limitations on Health FSA, rolled back federal insurance standards, and delayed the Cadillac Tax until 2025. It would have also reduced subsidies for private insurance, set new limits on Medicaid spending, and repealed hundreds of billions of dollars in taxes and penalties created by the Affordable Care Act.

Without those changes, ACA requirements and penalties remain fully in place. House Speaker Paul Ryan said on Friday, "We are going to be living with Obamacare for the foreseeable future." Health care reform continues to limit the use of Health FSAs and HSAs, and the Cadillac Tax will take effect in 2020.

Applicable Large Employers (ALEs) will likely feel the effects of this result the most noticeably. ALE status needs to be calculated at the beginning of each calendar year and - counting on a repeal - some employers did not make this calculation prior to 2017. Others have not made their 2016 filings yet. The IRS filing deadline for 2016 is March 31, 2017, which is this week. Additionally, some employers placed other ACA tracking efforts on hold (i.e. establishing look back periods, tracking employee statuses, and obtaining dependent Social Security Numbers).

Instead of adapting to the changes expected from AHCA, employers need to continue with - and in some cases catch up on - their ACA compliance practices. As House Speaker Ryan said on Friday, "I don't know what else to say other than Obamacare is the law of the land. It'll remain law of the land until it's replaced." For now, the GOP intends to shift its focus and efforts to tax reform.

At Clarity, we are committed to helping our clients stay compliant and up to date with legislative changes that effect their benefits. Our solutions help automate ACA reporting and tracking, simplify complex benefit processes, and realize pre-tax benefit savings.