Senate's ObamaCare Replacement Bill Would End Employer Mandate

Determined to pass health care legislation before the July 4th break, the Senate on Thursday night released a draft ACA replacement bill called the Better Care Reconciliation Act (BCRA). As of this morning, at least five Republican Senators have said they won’t vote for the bill. GOP Senate leaders can only afford to lose two members of their 52-senator caucus in order for the bill to pass. (The loss of two would require Vice President Pence to cast the tie breaking vote, assuming not a single Democrat supports the bill.)

While passage as the bill stands now seems dubious, Republicans and the White House see this as one of the last chances they have to pass healthcare legislation before they can move on to tax reform, so amendments are likely to win back some of these Senators. That process, however, could push the vote to after the July 4 break. Still, Majority Leader Mitch McConnell is a seasoned politician, and many pundits doubt he’d call for a vote before the recess if he didn’t have a few aces up his sleeve.

Let's look at several elements of the bill which are particularly pertinent to employers:

Commonalities Between The House and Senate Bills

The bill released by the Senate sticks closely to the bill that was narrowly approved by the House, at least regarding employer-sponsored group health plans. For instance, both bills would:

• Eliminate employer mandate penalties and ease employee tracking/reporting requirements
• Eliminate individual mandate penalties
• Keep but delay the "Cadillac tax," and eliminate other levies
• Raise health savings account (HSA) contributions
• Repeal tax increases on HSAs
• Repeal the limit on contributions to health flexible spending accounts (FSAs)
• Allow states to repeal essential health benefits mandated by the ACA

Differences Between the House and Senate BIlls

To be sure, there are some differences between the two bills, including:

• Health care subsidies tied to income, rather than age (just as the ACA functions today)
• A tightening of eligibility criteria for the income-based subsidies (still based on poverty level)
• Elimination of the House bill’s provision allowing state to opt-out of pre-existing condition protections

Commonalities Between ObamaCare/ACA and the Senate Bill

What the Senate bill (as it stands now) has in common with ObamaCare (as it exists today), includes:

• ACA reporting requirements (though less stringent)
• Mandated dependent coverage to age 26
• First-dollar coverage of preventive care
• Prohibition on annual and lifetime dollar limits
• Prohibition on preexisting condition exclusions

Next Steps

The Senate has not taken a vote on any ACA repeal or replacement proposal at this time. The proposal would need a simple majority vote in the Senate to pass. However, amendments, all but guaranteed, will have to crafted before a Senate vote is taken. Democrats could also stonewall by offer up enough amendments to sidetrack the process for weeks.

Senate Republicans have indicated that they would like to take a vote prior to the Senate’s July 4 recess, which seems aggressive considering the bill needs to be “scored” by the Congressional Budget Office (CBO), which will estimate how many additional Americans would go without health insurance under the plan and how passage would affect federal spending. Already the bill is being label "a tax bill in disguise" by its detractors, so the CBO score isn't likely to make the GOP's job any easier.

After the CBO score, the Senate will vote on the bill. If the bill passes, it would go to joint committee where the House and Senate versions would be reconciled. That final bill, depending on the scope of its changes, may again need to be approved by the House and Senate.

Download Our Legislative Brief For All The Details

For more details about the bill and its impact on employers, download our free five-page legislative brief here.