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Republicans Roll Out the American Health Care Act – Employer Priorities

By Stephen P. Bond and Christopher J. Carney | March 08, 2017

    On Monday night the House Republicans rolled out their proposal for responding to the Affordable Care Act. Termed the “American Health Care Act,” it extends for 123 pages. Assuming you haven’t yet had the chance to review them, here are two provisions that may be of greatest concern to you as an employer:

SEC._06 EMPLOYER MANDATE.
(a)    IN GENERAL. —
        (1) Paragraph (1) of section 4980H(c) of the Internal Revenue Code of 1986 is amended by inserting “($0 in the case of months beginning after December 31, 2015)” after “$2,000”.
        (2) Paragraph (1) of section 4980H(b) of the
Internal Revenue Code of 1986 is amended by inserting “($0 in the case of months beginning after December 31, 2015)” after “$3,000”.
(b) EFFECTIVE DATE. — The amendments made by this section shall apply to months beginning after December 31, 2015.

SEC._05. INDIVIDUAL MANDATE.
(a)    IN GENERAL. — Section 5000A(c) of the Internal
Revenue Code of 1986 is amended—
        (1) in paragraph (2)(B)(iii), by striking ”2.5 percent” and inserting “Zero percent”, and
        (2) in paragraph (3)—
            (A) by striking “$695” in subparagraph (A) and inserting “$0”, and
            (B) by striking subparagraph (D).
(b) EFFECTIVE DATE. — The amendments made by this section shall apply to months beginning after December 31, 2015.

    Even if you were searching for these provisions, you might slip past them on page 84, since it is not obvious how these provisions “replace” “Obamacare.” But, evidently, the plan is to leave the existing language pertaining to the “employer mandate” and the “individual mandate” in place; but, to make the penalty for not complying $0. That’s how Staff of the Republican Majority of the “Ways & Means Committee” explains it: “This section would reduce the penalty to zero for failure to maintain minimum essential coverage; effectively repealing the individual mandate. * * * This section would reduce the penalty to zero for failure to provide minimum essential coverage; effectively repealing the employer mandate.

    Regardless of the logic in wording the Bill in this manner, the good news is that the Bill which seems to have the attention of the majority includes removing this mandate for employers; and, it makes this provision retroactive to January, 2016.

    Another provision you may have an interest in is the so-called “Cadillac” tax. While this Bill leaves the anticipated tax on high-cost employer-sponsored plans in the law, it moves the effective date out to calendar year 2025.

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