Congress approved a budget blueprint last week that sets up a vote on a formal repeal measure as soon as January 27th. However, Republicans remain committed to a “repeal and replace” approach, and have suggested that any changes to the employer mandate may take years to go into effect.
Republican Chris Collins, part of Donald Trump’s transition team, went as far as to say there will be no changes until 2018.
“Immediately, what we’re saying, is we’re not going to pull the rug out from under anyone,” he said. “There’s not going to be any changes in 2017. There’s not going to be changes in 2018.”
Vice President-elect Mike Pence seems to agree in principle. While he has continuously identified the repeal of the ACA a top priority for the incoming administration, he also acknowledged there are many undetermined factors.
“Republicans are still working to understand how much of (ACA) can be repealed through reconciliation, the budget process that only needs a majority to pass in the Senate.”
While many things are still unclear, there are two likely paths forward — a piecemeal approach and a delayed repeal and replace — both of which could maintain some kind of reporting requirement for businesses in the replacement version.
The Piecemeal Approach
The first approach, spearheaded by Senate Budget Committee Chairman Michael B. Enzi, would replace pieces of the law over time, a model in which the first of a series of “repeal” bills will be imminently passed and signed into law, after which the first of a series of “replace” bills will be passed and signed into law. Then, the process would repeat with each subsequent piece of the bill, until it has been fully re-built.
“The (ACA) bridge is collapsing, and we’re sending in a rescue team,” Enzi told the New York Times. “Then we’ll build new bridges to better health care, and finally, when these new bridges are finished, we’ll close the old bridge.”
The Delayed Approach
Senator Rand Paul proposed an alternative approach that would delay any repeal vote until the GOP drafts a bill containing a complete plan to replace ACA. This would allow the repeal and replace to occur simultaneously but not immediately.
Under this approach, ACA would remain intact for up to two years. President-elect Trump expressed support for Senator Paul’s plan in his Wednesday morning press conference, and it appears his pending HHS Secretary Tom Price also favors this plan (See here for a detailed examination of Tom Price’s proposals).
Other Republicans in the Senate have also expressed their desire to push back the suggested Jan. 27 repeal date in favor of a simultaneous repeal and replace.
“I don’t see any possibility of our being able to come up with a comprehensive reform bill that would replace Obamacare by the end of this month,” said Republican Senator Susan Collins. “I just don’t see that as being feasible.”
The House of Representatives was hesitant to vote on the budget blueprint based on the absence of agreement as to the timing of repeal and replace – a concern shared by many Senate Republicans.
Incoming White House Chief of Staff, Reince Priebus, said last weekend on “Face the Nation” that he expected a full replacement would require more time in order to draft legislation and design the necessary infrastructure.
By way of replacement, Senator Paul describes his approach as a “greatest hits” of Republican proposals, including the following:
- Less costly insurance plans to get buy-in from young people
- Expanding the services covered under Health Savings Accounts
- Enabling small businesses to form health insurance associations
Senator Paul is expected to introduce a framework of his replacement bill as soon as this Monday.
The Sovos Perspective
- While there are two options to “repeal and replace” ACA, businesses should prepare to comply with the current employer mandate through 2018.
- The continued focus on a strong replacement means there will likely be some kind of employer reporting requirement — and, to mitigate risk and avoid unplanned resource strain, businesses should implement solutions that are strong enough and flexible enough to both interpret new regulations and comply with reporting requirements associated with those regulations.
- Businesses should pay close attention to decisions over the next few weeks, but be prepared to stay patient because significant details on employer obligations are unlikely to take shape for some time.
- There will be help for businesses as this evolves. Here at Sovos, our core business is built on helping businesses navigate through the turbulence of business-to-government compliance — and we combine world class regulatory analysis with nimble software to safeguard businesses from risk and workload as reporting requirements change.
For further information, we suggest the following sources:
- See how your business stacks up on ACA compliance. Read Aberdeen’s Affordable Care Act benchmark report.
- Keep up with the IRS here.
- “Still no ACA replacement plan, but GOP ads say it exists and is awesome,” from ArsTechnica.
- The Future of the ACA Week 5: The Rep. Tom Price Plan(s) from Lexology.
About the AuthorMore Content by Gerry Nelligan