Delivering for Best-in-Class Wholesaler-Distributors
January 11, 2017

In the aftermath of an initial false start, the House of Representatives in May 2017 passed the American Health Care Act (“AHCA”) by a vote of 219 to 213 (with 20 Republicans joining all 193 Democrats in opposition).

Senate Republicans were not able to produce a bill capable of garnering the 51 votes needed for passage, and the legislative process aimed at repealing and replacing Obamacare came to a grinding halt prior to Congress’ annual August/Labor Day/ District work period.

Nonetheless, progress was made on building support for several issues long on the NAW agenda in this space.  For example, the House-passed AHCA included

  • Elimination of the employer mandate penalties applicable to employers with 50 or more full-time employees.
  • Extension of the delay in implementation of the 40% excise tax on high-cost employer-sponsored health plans (the “Cadillac Tax”).
  • Full repeal of the annual fee on health insurance providers (the “health insurance tax” or “HIT”).
  • Expanded use of health savings accounts (“HSA”) and flexible spending accounts (“FSA”).

Of crucial importance was the absence of any limitation on the exclusion from income of the value of employer-sponsored health benefits.

Two additional NAW-supported health bills passed the House in the spring:  the Small Business Health Fairness Act authorizes the formation and multi-state operation of both self-funded and fully-insured association health plans (“AHP”); and the Self-Insurance Protection Act (“SIPA”) shielding stop-loss insurance from being regulated as health insurance.  SIPA’s enactment would reaffirm long-standing policies to ensure employers can continue to offer workers flexible, more affordable health care plans through self-insurance.

It is not clear whether/when consideration of ACA repeal/replace legislation will take center stage.  For the moment, the focus of activity in the Obamacare space has pivoted to legislation to stabilize the ACA exchanges.  NAW’s focus is fixed on extending the pause in the HIT (which went back into effect on January 1, 2018 following a one-year hiatus) and extending the Cadillac Tax delay (now set to expire in 2020).

In addition to the previously-mentioned legislative action on association health plans, AHPs were the subject of significant regulatory action as well.  On October 12, 2017, the President issued an Executive Order directing, among other things, the Secretary of Labor to “consider proposing regulations … to expand access to health coverage by allowing more employers to form AHPs.”  On January 5, 2018, the Department of Labor’s Employee Benefits Security Administration fulfilled the President’s directive by publishing a Notice of Proposed Rulemaking that would significantly change the way AHPs are regulated.  NAW is in the process of reviewing the NPRM and plans to comment.