The American Health Care Act is likely to have numerous effects on the healthcare workforce in general, and specifically on employer-sponsored health coverage.
"We're in a period of major change in healthcare policy and technology, which is driving healthcare consumerism. In many ways, health policy is acting as an accelerator of consumerism, but is not defining it. Many of the changes we've seen among employers would have happened with or without the ACA," says Shan Fowler, senior director of product strategy at Benefitfocus, a developer of cloud-based enterprise benefits management software.
He added: "Compliance is a driver of change as well, along with cost, complexity and consumerism. Regardless of what happens with the ACA, employers will still base their benefits decisions on what's best for their employees. Employers are focused now on trying to cut through the noise to figure out how the changes to the ACA will affect them and their employees."
Mr. Fowler recently spoke with Becker's Hospital Review about the American Health Care Act provisions most likely to have the biggest effects on the healthcare workforce.
1. The delay of the Cadillac tax and the exclusion of a cap. The AHCA delays the effective date for the ACA's Cadillac tax on the most generous employer-sponsored health plans, according to The Hill. The tax would impose a 40 percent excise tax on such plans. It was originally slated to take effect in 2018 but was delayed to 2020, and a recent "manager's amendment" to the AHCA would delay the tax until 2026. While both Republicans and Democrats have supported repealing the Cadillac tax, GOP lawmakers are delaying but are forced to keep it as part of the reconciliation process to make certain their replacement plan will not increase the national deficit after a decade, reports The Hill.
Mr. Fowler says although the Cadillac tax would be delayed and likely never enforced, it doesn't necessarily mean the idea of a similar proposal — to cap the employer health insurance tax exclusion — is off the table. House Republicans previously proposed the cap as a way to pay for a repeal of the ACA, according to a Bloomberg BNA report. "Employers for decades have gotten a very healthy tax benefit from offering health insurance Section 125 benefits to employees. There's never been a cap on it. So the more you spend on insurance for employees the higher the tax benefit," says Mr. Fowler. Although earlier drafts of ACA replacement legislation capped the exemption at 90 percent of current premiums, the final version of the bill eliminated the proposal, according to Politico.
Still, in terms of the healthcare workforce, Mr. Fowler believes the most generous employer-sponsored plans would be most affected if there is ultimately a cap on the exclusion. "But I [also] think there is an argument to be made that there is some overinsurance and what the cap and Cadillac tax was trying to get at besides increasing revenue is fending the divide between the poorest coverage and richest coverage and trying to change behavior, bring down costs to make healthcare more affordable for a broader group of people," he adds.
2. Employer mandate being dropped. The AHCA also gets rid of the penalty for businesses that do not offer employees health coverage. Additionally, the AHCA replaces income-based subsidies under the ACA with refundable, age-based and income-capped tax credits, according to Politico. These credits increase with age, from as low as $2,000 for those under 30 or as high as $4,000 for those over 60. They can be used to help people buy insurance if they can't receive coverage through their employer.
Mr. Fowler says he believes the employer mandate would ultimately be eliminated, even if the AHCA doesn't pass. "If the AHCA doesn't pass, you could still see HHS Secretary [Tom] Price, [MD], refusing to enforce the employer mandate — that's probable," he says. In the short term, Mr. Fowlwer believes eliminating the employer mandate would remove a burden from employers. Still, he acknowledged reporting of some kind is likely to continue because even in the ACA replacement plan, there is the concept of employer vs. individual coverage and eligibility for tax credits. "It seems some sort of reporting would remain and the need for flexibility in systems to comply would likely remain for employers," he says.
3. The expansion of health savings accounts. HSAs, which are typically matched with high-deductible health plans, would have expanded contribution limits under the AHCA, according to a CNBC report. Under the AHCA, people would also have more flexibility in how they spend funds in HSAs, the report states. Additionally, the recent "manager's amendment" to the ACA replacement proposal also calls for immediate repeal of the HSA tax.
"What Republicans are looking at is really a boon for consumerism and promoting it in healthcare. And I think you see this is in some of the language of empowering choice, enabling individuals to make choices and to be involved in their healthcare — not letting the government get between you and healthcare," says Mr. Fowler. He says the AHCA promotes HSAs doing this by allowing employees with HDHPs to set aside more money and to shop around for their services and health needs. Since the annual HSA contribution maximums would be tied to maximum out-of-pocket costs under the AHCA, the bill provides more incentive for people to pay their medical bills, he says. "So it's seen on the employer and individual sides as enabling people to be better covered with adoption of HDHPs. And with that I think there are a lot of changes to further promote innovative ways to spend that money and save on costs that are coming out of your pocket as opposed to the traditional copay system. It just makes you think about your benefits in a different way."
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