Healthcare: From ACA to AHCA? A Quick Overview
Let's have a quick look at what is at stake.
- Healthcare benefits are not mandated in the same title as FICA or SS. The mandate is "individual."
- Offered Healthcare benefits have to cover "Essential Coverage."
- The Patient Protection and Affordable Care Act provisions offers what is called the Metal Plan
- Small Groups Market: Health care coverage for individual- and small-group markets has only one level
- If Healthcare benefits offered are not "affordable", and do not offer "minimum value," employees can go to the Marketplace
- Minimum value: at least 60% of costs should be covered by the plan
- Affordable: the employee's cost is not to exceed 9.5% of his/her annual, total income
- For calculations of affordability, methodology is strictly based on 30h/week as a FTE. Refer to healthcare.gov or cms.gov
- Any employer who has an employee choosing to go to the Marketplace will be "taxed" a "shared responsibility payment"
- With 50 or more FTEs and not offering minimum value health benefits to eligible employees and their adult children up to age 26: the penalty is of $2,000/FTE if at least one full-time employee receives a tax credit/subsidy through the Marketplace.
- If employers provide coverage: the penalty is of $3,000/FTE who obtains coverage through an exchange and receives a premium tax credit/subsidy.
- Metal plan does not apply (affordability is based on lowest level of coverage offered)
- Small employers of 50 or less: There is no penalty for not offering Health care coverage
- Individuals: Healthcare coverage purchase is mandated. Penalty vary from $95/adult and $47.50/child to $285/family or 1% of annual income- Demystification: Income is defined as total income beyond the filing threshold
- Small employers purchasing coverage through Small Business Health Options Programs (SHOP) could be eligible for a tax credit of up to 50% of their premium payments
- The Metal Plan is also defined as "Essential Health Coverage," which differs from minimum essential coverage, and that includes the following 10 categories (cf. SHRM):
- Ambulatory patient services.
- Emergency services.
- Maternity and newborn care.
- Mental-health and substance-use-disorder services, including behavioral-health treatment.
- Prescription drugs.
- Rehabilitative and habilitative services and devices.
- Laboratory services.
- Preventive and wellness services and chronic disease management.
- Pediatric services, including oral and vision care.
WHAT IS THE AHCA ABOUT?
As of this morning, from last night latest modifications, there is a change in baseline requirements. Practically, many basic protections under the ACA will fade away for the consumer. Definitely a challenge for all stakeholders. IF - and this is a big if - this new, revised version of the bill passes today, employers will have no choice but craft their healthcare policies to actually offer value to their current and prospective employees. On a broader scale, it is to be expected that the shift of lack of coverage for an increased number of individuals - predicted to reach 1/6th of Americans, or 54 millions, by 2026 according to this source - due to unaffordability will increase the burden of cost to insured individuals through predictably higher premiums. Check here how it would affect grassroot America.
FACTS ON CHANGES
As a background note, healthcare cost, regardless of ACA, was becoming increasingly challenging for individuals with premium ranging from 27 percent to 37 percent, deductibles from 34 percent to 43 percent, and copays from 24 percent to 31 percent. Check here. As a whole, the burden of healthcare cost had progressively, but consistently, shifted from employers to employees. While many companies have adjusted their policies to remain competitive, others have drastically reduced healthcare coverage. It is common knowledge that healthcare benefits remain determinant in talent acquisition and retention, no matter the level of the talent, and no matter the industry. As far as industries are concerned, it is a matter of strategic choice in a VUCA world.
The Kaiser Family Foundation has released several documents and findings about the AHCA.
- Individual Mandate versus Penalty for Lapses: The Individual mandate would be replaced by a 30% penalty for lapse of coverage. The penalty is based on premium rather than on length of lapse. For more facts check on the subject click here, but keep in mind that this bill project has been evolving up to over the last few hours and essentials coverage is apparently no longer a given. It would be a State determination, going forward.
- Essential Coverage is NOT Granted: As the "people" are summoned to a vote on the bill today, the definition and application of Essential Health Benefits (EHB) has been altered. Latest changes would shift the determination to States. We could expect an over-complication of Healthcare Benefits policy redefining for multi-states businesses.
- Cost Sharing via Credits, with more to older and higher income people: All individuals are in the same pool and receive a credit, relatively regardless of their earnings, but following a certain bracket. Per a Kaiser research, for a younger person (Millenial example) with a lower income (20K) the credit would be scaled down to $2,000 from $3,225 a year. The income cap would be 75K for individuals and 100K for families, with credits of up to 4,000 a year for those who are 60 year-old and plus. You may see more details here.
- Changes on Women's Healthcare: From mammograms and preventive services to maternity care and contraception, there would be major sweeps. If you want to watch and learn more about the briefing and issues at stake for women, click here. Why does it matter? By DOL 2015 data (Labor Force Participation Rates - 2015 averages and 2024 projections), nearly 60% of women are part of the labor force, that is 72 million in 2010. The argument is that ACHA does not affect employed individuals. The counter argument would be that any Government policy will and does affect businesses and their policies.
Il n'y a encore rien à dire, en vérité. L'on saura en fin de journée et ce sera fini - l'on espère du moins - des spéculations et "deals" et débats infinis sur l'Assurance Santé aux Etats-Unis. Bon à noter tout de même: les enjeux sont les Essential Health Benefits (EHB), les subventions, l'assurance-santé pour les femmes (de la prévention à la maternité, et en passant par la contraception). Si vous voulez en savoir plus, cliquez ici et ici ou encore ici. Et voici ce que SHRM en dit.
Mise à jour: Status Quo. Mais pas vraiment... On verra bien, car tout chemin mène a Rome.