Your 2018 ACA & Health Care Reform Outlook

Your 2018 ACA & Health Care Reform Outlook

ACA and health care reform dominated the headlines in 2017, but ultimately we saw more words than action. This year, on the other hand, we're likely to see fewer words (and votes) devoted to ACA and health care reform, but potentially actions of greater significance for benefit professionals.

What do I mean by that? I'll tell you, but first let's review what happened over the last year.

Failed 2017 ACA Repeal Efforts

Congressional Republicans made several different attempts to repeal the ACA in 2017, all of which ultimately failed.

They started with a "repeal-and-delay" strategy, whereby they would first get rid of the ACA through the "reconciliation" process, and then over a period of time come up with a replacement. When support for that plan faltered, they moved to one that would repeal and replace the ACA simultaneously. That took the form of the Better Care Reconciliation Act, which died on the Senate floor. 

And then, in one of the most dramatic moments in modern Congressional history, Sen. John McCain joined Sens. Susan Collins and Lisa Murkowski in crossing party lines to vote down a "skinny repeal" bill, which would have repealed only certain portions of the ACA.

With mid-term elections looming large in 2018, it's not likely Republicans will take up ACA repeal-and-replace efforts again in the coming months.

Individual Mandate in Tax Reform

However, Congressional Republicans were able to score a "win" with the tax reform bill signed into law by President Trump in December.

The bill included a provision to zero out the penalty for not complying with the ACA's individual coverage mandate—which was essentially the same as repealing the individual mandate. That goes into effect in 2019.

January Spending Bill's ACA Tax Changes

We saw a few key changes to ACA taxes included in a recent short-term spending bill from Congress, which:

  • Delayed the "Cadillac tax" on high-cost health plans until 2022 (previously 2020)
  • Delayed the medical device tax until 2020 (previously 2018)
  • Delayed the insurer excise tax until 2019 (previously 2018)

Learn more about the implications of recent ACA-related activity in this on-demand webinar.

Now let's look at what other changes could be coming in 2018.

Health Care Reform in March Omnibus Spending Bill

Congress is currently working on putting together a so-called "omnibus" spending bill, which essentially takes all of the various spending bills that fund different parts of the government (e.g., Department of Labor) and combines them into one huge bill.

Lawmakers often use bills like this to also pass provisions unrelated to spending, and this time around, they're looking to include a few health care policy items.

One of those items is the stabilization of the individual health insurance market, with two-year funding of the ACA's cost-sharing subsidy payments to insurers, along with funding to set up what's being referred to as an "invisible high-risk pool"—a mechanism to cover high-cost claimants in the individual market.

Other potential add-ons to the omnibus bill are ACA changes that would have a significant impact on employee benefits, if enacted.

For example, there's a fair amount of interest in Washington to push for retroactive relief from the ACA's employer mandate penalties, taking employers off the hook for noncompliance in 2015, if not also 2016 and 2017. That obviously would be huge news for the employer community.

The omnibus bill could also include policy changes to health savings accounts (HSAs) and consumer-directed health plans (CDHPs), such as:

  • First-dollar coverage for chronic care management and telehealth services
  • Ability to use HSA funds for wellness activities like a gym membership or exercise classes and equipment

Of course, none of this is a sure thing. Washington has a habit of being... well, Washington.

But regardless of any forthcoming legislative changes, employers have a greater strategic imperative to continue looking for ways to provide competitive benefits at a sustainable cost, and to engage employees and help them get the most value from those benefits.

For more on the current state of health care reform, including insight into other potential legislative and regulatory changes on the horizon, check out this on-demand webinar featuring CC Law and Policy's Chris Condeluci.