4 Ways Proposed Senate Health Care Bill Could Help Employers

Lewer Benefits Group | 6-26-2017

Thursday, the U.S. Senate released its first version of a health care bill called, “The Better Care Reconciliation Act” (BCRA). Many employers are already wondering how this latest attempt at health care reform will impact their businesses. This initial version is still being reviewed and will likely look different with proposed amendments before being voted upon in the coming days. In fact, four key Republican senators have already come out in a unified letter advising they will not vote “yes” on the bill in its current form, and a fifth senator has jumped on the no train along with them. The bill, however, contains a likely framework for what will be considered. While there are many parts within the 142 pages of the bill, we’ve outlined four key takeaways for employers to track.

No Employer Mandate

The current draft of the bill reduces the large employer penalty from $2,000 to $0 retroactively effective December 31, 2015.

What’s this mean for employers?

If your company was deemed a large employer with 50 or more full-time equivalent employees (FTEs), your company would not be penalized for failing to make a qualified offer of coverage to employees during calendar years 2016 and 2017.

Essential Health Benefits (EHBs) Flexibility

The 10 EHBs currently necessary to be included in all qualified plans are still in place, but language allows individual states to relax these requirements. These 10 EHBs, mandated since January 2014, are:

  • Ambulatory patient services (outpatient services)
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance use disorder services, including behavioral health treatment
  • Prescription drugs
  • Rehabilitative and habilitative services (those that help patients acquire, maintain, or improve skills necessary for daily functioning) and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including oral and vision care

What’s this mean for employers?

These relaxed requirements should result in more flexibility in plan design, depending in which of the 50 states your company is headquartered. This could be a positive change for employers as it could result in more control over costs.

Employer Reporting Reduction

Currently large employers, and certain companies offering qualified health benefits, are handcuffed with burdensome IRS reporting, which is expected to be eased under the new bill. 

What’s this mean for employers?

Relaxed reporting requirements will result in a reduction of employer time, resources, and costs allocated to completing and filing forms. 

Individual Subsidy Qualification

As it stands today, those making up to 400% of the federal poverty line qualify for income-based subsidies to purchase individual coverage through exchanges. The new version would lower the threshold from 400% to 350% for individuals.

What’s this mean for employers?

This would raise premiums for employees making $42,000 or more annually and could increase demand for employer sponsored coverage. If the BCRA becomes law, the offer of “Minimum Essential Coverage” (MEC) by an employer is enough to disqualify an individual from tax credit eligibility after 2019. Employers may want to re-think offering MEC coverage on this basis, and even prior to 2019, as there won’t be an employer mandate penalty to compel them to offer MEC plans.

What All This Could Mean to an Employer

It’s clear that some level of flexibility is the focus of the new draft but one concept remains true: Even with reduced requirements, wise employers committed to growth and retaining top talent will continue to strategically implement benefit packages that meet the needs of their employees.

Whether you currently offer coverage and are curious about your options, or you are exploring implementing a benefit package for the first time, Lewer is ready to assist in creating a program designed specifically for your business.

 

Author: Lewer Benefits Group