ACA Replacement Bills - What it Keeps, What it Changes
March 9, 2017
Earlier this week the House of Representatives released two bills to repeal and replace the Affordable Care Act (ACA). While neither of these bills have officially gone into law, we wanted to provide an overview of the new bills's impact on the ACA.
Provisions of the ACA the bills would keep:
Coverage for adult children up to age 26
Prohibition on health status underwriting
No pre-existing condition limitations, coverage must be provided for pre-ex
Guaranteed availability and renewability of coverage
Out of pocket maximum rules for cost sharing limits for Essential Health Benefits (EHB) for non-grandfathered plans
EHB packaged benefits for individual and small group remains
The age ratio would shift from 3:1 to 5:1 and states would be allowed to set their own limits
The new bills would push the effective date of the tax back even further to 2024
Provisions of the ACA the bills would change:
Repeal the Employer and Individual Mandate by setting the penalty to $0
This is replaced with a continuous coverage incentive that would allow insurers to add a 30% late enrollment penalty to premium costs for applicants with lapses in coverage of greater than 63 days in the past 12 months.
Surcharge would only apply for a year.
No more Health Insurance Subsidies for Individuals effective 2020
This is replaced with a tax credit
Expansion of Health Savings Accounts (HSA)
Increase Maximum contribution allowed by eligible participants in an HSA to $6,550 single (currently $3,400) and $13,100 family (currently $6,750).
Allow both spouses over age 55 to make catch-up contributions to the same HSA
Starting in 2018, allow over-the-counter medications as an eligible expense for HSA
Decrease tax rate back to pre ACA rate for distributions taken for non-qualified medical expenses
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