May The 4th Be with You
And if you are an ACA “Applicable Large Employer” (ALE), it was.
The American Health Care Act, H.R. 1628, with last minute amendments noted in H. Rep. 115-109, passed the House of Representatives on Thursday afternoon, May 4. Here is a very brief summary of the 131 pages of combined text, focused on changes for Applicable Large Employers.
The employer mandate tax isn’t repealed, but AHCA § 206 reduces the tax to $0 for 2016 and beyond. This leaves the IRS free to assess and collect 2015 employer mandate taxes from Applicable Large Employers, so don’t ignore notices you may receive soon. But if the employer mandate goes away, so do severe complications for collective bargaining and employee leasing arrangements.
AHCA § 207 suspends the Cadillac Plan tax until 2025, by which time we’ll all have Cadillacs, very probably.
Employer coverage reporting requirements and associated penalties are untouched by the AHCA. If you like filing your Forms 1095-C, you can keep filing your Forms 1095-C … or even if you don’t.
While the ACA’s anti-retaliation provision (29 U.S.C. § 218c) survives, its danger should subside, practically speaking. Employee subsidies to buy Exchange insurance present the biggest employer retaliation exposure, it seems to us, and AHCA § 203 ends those subsidies after 2019. AHCA § 205 sets the individual mandate tax to $0 after 2015, which should reduce the pressure on low wage employees to seek Exchange coverage and related subsidies in 2018 and 2019.
Of course, none of this matters unless the Senate goes along. There must be a parliamentary ruling that the AHCA may be considered under budget reconciliation rules, so that only 51 votes are needed. Then, with whatever changes are made, it must find at least 50 votes, plus the Vice President. Senate changes would require House approval thereafter. We’re still in Act II. It’s still messy, but it’s moving.