What the Senate motion to proceed on health reform means for employers

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Despite Senate Republicans on Tuesday narrowly agreeing to begin floor debate on healthcare legislation, it is business as usual for clients in regards to Affordable Care Act compliance.

Late Tuesday, the Senate rejected a modified version of Senate Majority Leader Mitch McConnell’s (R-Ky.) plan to change the Affordable Care Act. The Senate will vote Wednesday on an amendment similar to an ACA repeal bill passed in 2015 and vetoed by President Barack Obama. That is expected to fail, and the body will move onto a number of other proposals likely tied to specific goals for each state by their respective Senators. No matter what bill might pass, any changes would be rolled out over an extended period of time, Manuel Mendoza, ERISA and employee benefits counsel at USI Insurance Services, said Tuesday afternoon.

Speaking at EBA’s Workplace Benefits Mania conference in Las Vegas, Mendoza, who served as an investigator with the Department of Labor from 2010 to 2013, explained any changes will take time. “Slow is deliberate. The founding fathers want things to move slowly,” he said. “When government … moves quickly, things get overlooked.”

As a result, brokers need to continue to work with their clients as if nothing has changed, continuing with the status quo and being compliant with provisions of the Affordable Care Act, including:

  • Sending a notice of coverage to new hires within 14 days.
  • Continuing 1095-C and 1094-C reporting
  • Continuing to comply with final regulations on market reform ,such as covering children up to age 26 and preventive care
  • Paying applicable fees and taxes, such as reinsurance and PCOR fees.

“Nothing has gone away and [if] things do change, they will not change immediately,” Mendoza said.

While McConnell is hopeful a bill will pass the Senate this week, questions swirl about what that bill will contain and if he has enough votes to pass it. If the bill were to pass, it would then need to go back to a conference consisting of members of the House and Senate in order for an identical bill to pass in both bodies.

“There is still a lot of legislation in the way of things changing, and insurance companies don’t do things immediately,” Mendoza said. Changes, he added, wouldn’t take effect until at least 2018 or a timeframe where consumers would comply with.

Despite uncertainty over reform efforts in Washington, advisers need to help clients prepare for next year now.
June 15

“A lot of clients have to deal with the reality that the ACA is the law of the land,” he explained.

Despite what might happen on Capitol Hill, the Trump administration has other avenues to change the ACA, including through regulatory agencies, such as the DOL, Department of Health and Human Services and Internal Revenue Service.

Those also take time, as any proposed change must go through a comment period, Mendoza explained.

In the end, Mendoza predicts a final version of the bill will fail and the Senate will move onto changes through the tax code. “They expect the effort to fail,” he said.

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