If the Employer Mandate is Repealed, Should Companies Drop Employer-Sponsored Healthcare?

Jeff Griffin

President Trump promised to repeal ObamaCare on “day one”. While it’s going to take a little longer than he had planned, it does look inevitable that an overhaul to the Affordable Care Act (ACA) will eventually pass both houses of Congress, even despite recent legislative setbacks.

One of the least popular provisions of the law, at least for employers, is the “employer mandate”, which requires certain employers with 50 or more “full-time equivalent” employees (FTEs) to provide an affordable healthcare plan. With the proposed law as it stands today, now in jeopardy, a pressing question is now looming over employers: if the employer mandate really is repealed, should they drop their health coverage?

The issue certainly isn’t cut and dry, with some believing that no matter what happens in Washington, employer-sponsored healthcare is dying and others predicting it will never really go away. Assuming the ACA’s employer mandate is repealed, every company will have an important decision to make, weighing the benefits and pitfalls of dropping coverage.

Repealing the Employer Mandate

Republican lawmakers have spoken on countless occasions about wanting to repeal the employer mandate. The Trump administration even ran on a platform of getting rid of it. In theory, this doesn’t seem like a big deal, but in practice, it’s more difficult than it seems. The employer mandate, after all, is the primary mechanism by which healthier people are brought into the overall risk pool, which is the only way a healthy insurance market works (healthy people subsidize the unhealthy, essentially). Without it, most experts predict that insurers would pull out of the healthcare exchanges and the entire program will collapse.

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Topics: Employee Benefits, Affordable Care Act, ACA, Employer Mandate, Employee Retention

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Possible Healthcare Legislation Changes and How They Could Affect Employers

Jeff Griffin

Since the inauguration of a new president in January, healthcare legislation to replace the Affordable Care Act (ACA) has been a hot topic of conversation, not only among employers and healthcare providers, but many American citizens as well. Multiple rumors have been making their way down from Capitol Hill, but it appears as though we finally have some concrete ideas from House Republicans — even if they aren’t fully fleshed out in terms of finances

Regardless of what healthcare legislation is passed, it is largely expected that the employer mandate will be repealed, which will have some sort of effect on many American employers. Let’s take a look at the proposed healthcare legislation and other documents from the Department of Health and Human Services (HHS) to determine what employers might be able to expect from lawmakers in the coming months.

The New GOP Healthcare Bill

On Monday, March 6, 2017, House Republicans released what is being collectively referred to as the American Health Care Act (AHCA), which is intended to partially repeal, but also replace the ACA. As anyone might expect in a heated political climate, the proposed healthcare legislation has been met with mixed reviews.

The proposed bill would keep some of the popular components of the ACA, such as the provisions that prohibit insurance companies from denying coverage based on pre-existing conditions or capping the amount of benefits received in one year (or a lifetime). In addition, people would be allowed to remain on their parents’ health insurance plans up to age 26.

While pre-existing conditions would no longer be a reason insurance companies could deny coverage, they would be allowed to charge up to 30 percent more for enrollees who let their coverage lapse. Coverage lapses are common among those suffering from chronic illnesses or serious medical conditions because they are likely to miss work for an extended period of time. Since the Family Medical Leave Act (FMLA) only protects workers for 12 weeks, those receiving extensive treatments (such as chemotherapy) are some of the most commonly affected by lapses.

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Topics: Employee Benefits, Employer Mandate, Legislation

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