The American Health Care Act (“AHCA”), the legislation intended to “repeal and replace” the Affordable Care Act (“ACA”), was shelved on Friday, March 24, 2017, ending for now efforts to repeal the ACA. The AHCA, described in our recent blog entry, was introduced on March 6, 2017 and immediately faced strong opposition from both sides of aisle. After failing to negotiate a compromise, President Trump issued an ultimatum to Congress to pass the legislation by March 24, 2017 or else the ACA would remain in place. Unable to muster enough support for the AHCA, Congress withdrew the bill.
We now enter a new period of uncertainty with respect to the future of health care reform. Consistent with President Trump’s ACA executive order issued on his first day in office, his administration could take regulatory and sub-regulatory steps to weaken various ACA requirements as they have developed over the years. It is also possible that, in somewhat of a reversal of course in light of the failure of the AHCA, his administration would leave ACA unchanged under the belief that it is not sustainable and will eventually fail on its own.
Similarly, though some Republican members may continue to push for repeal and replacement, others may be content to leave ACA unchanged in the belief that it will fail on its own. Still others in Congress, potentially on a bipartisan basis, may look to other possible changes in health care law that do not go to the heart of the ACA structure in the same way as the AHCA would have. For example, stand-alone legislation related to health savings account expansion is currently pending. Legislation that would repeal the so-called Cadillac Tax has also been introduced. Bills that would repeal other ACA-related taxes and that would modify rules related to wellness programs have also been drafted. Whether any of these bills will make it to a vote is uncertain.
Despite this uncertainty, employers and plan administrators should continue to comply with the ACA’s mandates, including the employer shared responsibility mandate and ACA reporting. Importantly, instead of being delayed until 2025, as would have been the case under the AHCA, the Cadillac Tax is scheduled to become effective beginning in 2020. Though this is more than two years away, employers should begin planning now to minimize the impact of the tax.