As the word game semantics continue regarding repeal, replace, repair and rebrand, our clients who have businesses to run and don’t really care if you call it Obamacare, Trumpcare or Putincare, are really just focused on one thing: what, in practice, will actually happen so we can adjust our strategic planning and investment decisions accordingly? Well it’s a good thing we have some of the answers. Here is what we have gleaned from conversations and notes with congressional staffers and law firms who are deeply engaged in the sausage making:
1) The employer mandate penalty (i.e. “pay or play”) is not long for this world. This affects few clients as most midsize to large employers have already been offering coverage to their entire workforce for decades but for some in manufacturing, retail and hospitality this will likely be welcome news.
2) Exchanges for individuals (along with subsidization for lower income individuals) aren’t going anywhere – certainly not in the immediate term. Dismantling this piece would cause too much disruption for the millions enrolled as well as regressive tax effects for those who can’t afford coverage on their own.
3) Ban on pre-existing conditions is the new normal and health insurance cannot go backwards.
4) There’s almost certainly some cap coming on employer tax exclusion for medical coverage. The effect is nearly identical to the much maligned Cadillac Tax though unlike the latter, the focus of capping the exclusion is only intended to target medical programs (not all pre-tax benefits like dental, FSA, etc.) and only the truly richest programs.
5) Simplification is coming. Whether that is on 1095 reporting or wellness regulations, there is broad consensus that the never-ending stream of guidance and variations in arrangements are making it too difficult for employers to run their programs and file the necessary paperwork.
We view many of these developments as constructive. Ultimately, the devil is in the details, but it does appear that the tone and aggressiveness has moderated, (at least in regards to healthcare) paving the way for a middle ground in which employers may find some comfort.