The past 18 months have been a confusing time for employers— particularly when it comes to the Affordable Care Act (ACA). Although many people thought Congress would “repeal and replace” the ACA in 2017, it didn’t happen. Instead, employers have been left scrambling to understand what changes have been made to reshape existing ACA law, especially as it pertains to them.
To help your company cope with the changes and the current state of the ACA, here’s a timeline of what has occurred and what it means for U.S. employers.
January 2017: President Trump Takes Office
An executive order from newly-inaugurated President Donald Trump instructs U.S. agencies to “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden.” As a result, the Department of Health and Human Services (DHHS) removes ACA health care sign up information from healthcare.gov which affects the individual buyer, not the employer.
February 2017: IRS and Insurance Effects
The IRS announces that it will no longer reject tax returns that don’t indicate whether someone has health insurance. President Trump announces new rules that will make it more difficult to acquire insurance outside the 2018 enrollment period, and the insurance industry expresses support for the rules. Again, this affects the individual buyer, not the employer.
March 2017: Repeal-and-Replace Bill
The repeal-and-replace bill, formally called the American Health Care Act (AHCA), is introduced by House Republicans and every state receives a letter from the DHHS instructing them on new measures to “alleviate the burdens” of the ACA. Although government experts predict that the ACA changes will leave 24 million people without insurance within 10 years, new enrollments remain strong. Still no change for employers.
April 2017: Shifting Tides in the House
As Republicans attempt to get enough votes in the House to advance the repeal-and-replace bill, it becomes clear they don’t have sufficient support to pass it. In an effort to sway Democrats to negotiate, President Trump threatens to end subsidies that were helping low-income citizens. Again, no impact on employers.
May 2017: It’s Essentially Dead
Although the House passes the AHCA, it becomes clear that it has little support in the Senate to move forward. Still, the White House holds a victory celebration and President Trump declares Obama-era care health care law “essentially dead.”
June 2017: The Market Responds
Uncertainty about the fate of the ACA and AHCA causes major insurers to pull out of some individual markets. Anthem, Aetna, Blue Cross and Blue Shield, Humana, and Wellmark end coverage in certain states.
Senate leaders propose a bill called the Better Care Reconciliation Act (BCRA) that would repeal funding for the ACA. Government estimates show that 22 million Americans would lose coverage, but premiums would be lower in the long run due to reductions in services.
July 2017: The McCain Vote
After returning to the Senate from brain surgery, John McCain casts a decisive vote to take up a revised version of the BCRA, called BCRA 2.0. It quickly becomes clear, however, that there are not enough votes. Supporters of the bill try to push a last-ditch “skinny repeal,” or partial repeal, of previous health care law.
In what many considered a surprise move, McCain gives the deciding vote that ends the effort. In response, President Trump threatens to end certain Obama-era health care funding.
August 2017: Attempt at Reconciliation
As major insurers continue to pull out of markets and reduce competition, some Democrat and Republican leaders attempt to come together to create a bipartisan plan to stabilize the market.
Meanwhile the DHHS cuts advertising by almost 90% and announces that it will no longer work with local groups to do new health care enrollments.
September 2017: Last Gasp of Repeal and Replace
Senate supporters of repeal-and-replace efforts announce that they won’t reach the votes needed. At the state and local level, there is widespread confusion about enrollments, waivers, and “reinsurance” reimbursement programs that could help states manage health care costs.
October 2017: Executive Order
President Trump signs an executive order making it easier to buy insurance that doesn’t meet ACA standards and cuts off certain cost-sharing payments to insurers, which he called “unlawful bailouts for the insurance industry.” This again affects individual buyers, not employers. This executive order does not impact the employer mandate.
November 2017: Open Enrollment
Health care enrollment for 2018 opens, shortened to 6 weeks from the previous 12 weeks. There’s debate about whether enrollments are up or down. The Senate addresses the “individual mandate” that requires citizens to have health care by proposing to eliminate it in a new tax bill. No mention of the employer mandate.
December 2017: Tax Bill Promises
The new Tax Cuts and Jobs Act is touted as “essentially” repealing the health law. This is not the case: the new tax plan does repeal the individual mandate as of 2019 but does not touch the employer mandate.
January 2018: Shutdown
News outlets begin reporting that the individual mandate has been repealed. After a brief government shutdown, the Department of Labor proposes a rule that would allow small businesses to band together in group health care purchases.
Experts in the insurance and actuarial industries warn that such plans provide insufficient coverage and threaten the stability of the market.
February 2018: Short-Term Insurance
The HHS and President Trump introduce a proposal to allow insurers to sell short-term insurance plans that would replace coverage for many rural and low-income users of the ACA.
March 2018: Final Spending Bill
Despite various promises and insinuations from Senators, the year’s final spending bill passes without so-called ACA stabilization measures. Public confusion about the individual mandate causes experts to weigh in, explaining that although President Trump had signed a tax bill removing the individual mandate, it remains in effect through 2019, meaning taxpayers will owe a penalty if they didn’t have insurance or an exemption in 2017. The employer mandate remains untouched.
April 2018: New Enrollments Continue
Although opponents view the ACA as dead, enrollments continue, with about 11.8 million new enrollments during the open period. Many employers struggle to understand where things stand, particularly in terms of the individual mandate and employer mandate.
May 2018: Bracing for Change
Citizens brace for rising insurance premiums as they discover many insurers have now pulled out of their area. Senate Republicans blame Democrats, and vice versa. The Trump administration attempts to expand short-term and group-buying insurance plans and some states announce they will pursue new reinsurance programs.
June 2018: On the Back Burner
By June 2018, some health care watchdogs see the debate sitting on the back burner, as midterm voters have been focusing on local issues rather than national health care law.
However, the Trump administration continues to fight ACA protections, asking federal courts to strike down protections for people with preexisting conditions. No changes are predicted to happen quickly, because the issue may go all the way to the Supreme Court.
Where Does This Leave the Employer Mandate?
Although the individual mandate will end in 2019, the employer mandate remains in effect. The IRS has issued about 10,000 notices (Letter 226J) since the IRS began enforcing the employer mandate in November 2017.
This means IRS Letter 226J could still arrive in your mailbox. Are you sure your organization is 100% compliant with the employer mandate?
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