Following the Senate’s passage of a tax bill that includes a repeal of the Affordable Care Act’s requirement that all individuals carry health insurance, many business groups fear removing the individual mandate will create chaos in the insurance marketplace that will translate into higher premiums for employers.
EBA talked with American Benefits Council President Jim Klein about next steps for combining Senate and House tax reform legislation and how Congress can act to ensure the employer-based health insurance market is stable. What follows is an edited transcript of that conversation.
EBA: The House bill did not include a repeal of the individual mandate. Will this survive conference committee negotiations between the two chambers?
James Klein: My guess is there is a very strong likelihood that the House would agree to that. They have a Republican majority and voted earlier this year to repeal the ACA.
EBA: Then what happens?
Klein: There are a whole lot of things that need to be done to stabilize the marketplace. It also seems to us to be fundamentally a bad idea if the individual mandate is gone to leave the employer mandate in place with all these challenging reporting requirements. The whole purpose of the employer mandate is to support the individual mandate. So if the individual mandate is going to be replaced, then Congress really needs to act immediately to address a number of things to give employers relief and to stabilize the individual marketplace.
EBA: What other changes need to be made? What is your top priority?
Klein: Repeal of the Cadillac tax and [resumption of] cost-sharing reductions. This is a payment that the government makes directly to the insurance companies to reduce the various out-of-pocket expenses that low income individuals have — co-payments and those types of things. The administration has cut off making those payments because they never were explicitly appropriated by Congress.
EBA: A letter from the Congressional Budget Office recently indicated that the bipartisan bill to restore those payments wouldn’t make much difference in stemming the growth in the number of uninsured individuals if the mandate is repealed. Do you disagree?
Klein: I think it would help, but it certainly is not going to resolve the issue. But, unless the mandate is replaced by something as it was in the early repeal-and-replace bills, there’s going to have to be some steps taken very soon to ensure the least disruption.
EBA: Any hope for any healthcare tax repeals?
Klein: We’re working hard on pushing for the Cadillac tax repeal. There is Republican interest to deal with the medical device tax and the health insurance plan tax as part of a year-end funding bill. Those two taxes have always been addressed in conjunction with the Cadillac tax, and we strongly believe they should continue to be.
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