Most of the discussion surrounding the impending King v. Burwell decision has focused on what happens if the Supreme Court rules that subsidies are illegal. If that occurs, Congress might only address that one issue. Should the high court uphold the subsidies, Congress might not take any action.
Either conclusion would be a mistake, said James Klein, president of the American Benefits Council. Regardless what ruling is handed down, immediate action is needed to preserve employer-sponsored health coverage, Klein said Wednesday when ABC released six legislative recommendations surrounding the Affordable Care Act.
1) Expand health reimbursement arrangements
ABC would like employers to be able to give employees pre-tax dollars to purchase coverage on or off the exchanges.
2) End the Cadillac tax
The excise tax on high-cost group plans set to take effect in 2018 is already impacting employers and employees, said Katy Spangler, ABC senior vice president of health policy. Some employers are reducing the benefits they offer as they make incremental changes in an attempt to avoid the tax, she said.
The tax which fails to make adjustments for certain factors such as location should focus on the richest plans, not high-cost plans, Spangler said.
3) Modify the employer shared responsibility requirement
The provision, commonly referred to as pay or play, requires employers with 50 or more full-time employees those who work at least 30 hours a week to offer health coverage or pay a penalty. The provision, which went into effect this year, is cumbersome for employers, who have added responsibilities such as tracking the number of hours employees work and determining eligibility, said Kathryn Wilber, ABC senior counsel of health policy. This is a very complex process, she said, with a very, very substantial set of regulations.
Employers should have some relief, Wilber said. Currently, employers with 100 or more full-time employees can avoid the penalty for the 2015 plan year if they offer coverage to at least 70% of employees. Wilber suggested extending that into 2016 to give employers the opportunity to work through these regulations.
4) Simplify employer reporting requirements
The employer reporting requirements that apply to the 2015 tax year must be simplified, Wilber said. This is a very, very complicated and new set of reporting requirements, she said. Almost akin to developing a new W-2 system.
5) Repeal automatic enrollment requirements
The requirement that employers must automatically enroll new full-time employees in health plans could have adverse effects, Spangler said, such as disqualifying employees for subsidies. Auto enrollment is unnecessary since nearly everyone is required to have health insurance under the ACA, Klein added.
6) Improve Health Savings Accounts
Health Savings Accounts have become more popular over the past decade, Spangler said, but several improvements are needed. She highlighted a couple recommendations such as clarifying that certain drugs are preventative care that might be covered before an employee reaches their deductible.
Also, there shouldnt be an age restriction on which employees can contribute to their HSA, she said. Employees who are age 65 and older should be permitted to make contributions despite being enrolled in Medicare, Spangler said. Employees should be allowed to contribute to their HSAs until they retire.
