Just when the Affordable Care Act’s IRS reporting requirements were beginning to seem familiar, the November elections have ignited uncertainty and speculation about the ACA’s future. Will the regulations we’ve all worked so hard to understand remain intact, or will changes to the law result in new twists and turns?
Speculation abounds, but what changes are legally possible to the ACA? How could the change process work? Let’s examine both formal and informal ways changes may occur.
Changes Through Congressional Action
There are two major ways the ACA could be changed by Congress: “repeal and replace,” or through the “reconciliation” process.
- Repeal and Replace: In this scenario, all the ACA provisions could be altered or replaced. Both the House of Representatives and Senate would have to approve the changes. In the Senate, bills proposing changes could be halted by a filibuster. To overcome a filibuster, 60 votes are needed. So any bills proposed would need to attract support of at least 60 Senate votes to halt a filibuster. In 2017, the Senate will contain 52 Republicans and 48 Democrats. A blanket repeal of the ACA seems unlikely, since it can be effectively blocked by the filibuster process.
- Reconciliation: Alternatively, Congress could make changes by passing a budget resolution that includes a reconciliation instruction. A reconciliation bill could then be passed by both houses making changes to the ACA. A simple majority is all that is required to pass a reconciliation bill; it cannot be held up by filibuster. Only revenue-related changes could be made under reconciliation. Much of the ACA was originally passed using this method.
Sections of the ACA considered revenue-related are:
- Individual and employer mandates
- Exchange subsidies
- Expansion of Medicaid
- ACA taxes like the Cadillac and medical device taxes
Non-revenue sections, which likely cannot be changed under reconciliation, are:
- First-dollar coverage of preventive health care
- Prohibition on pre-existing condition limitations
- Prohibition on annual and lifetime limits on certain benefits
- Required coverage of dependents to age 26
The reconciliation process has been used to attempt changes to the ACA in the past. For example, in 2015, budget reconciliation legislation containing invalidation of many of the ACA’s revenue-related provisions was passed by Congress, then vetoed by President Obama.
Change Through Informal Avenues
Agency enforcement is an area where immediate action could be taken after inauguration. The new administration could direct agencies to stop enforcement of existing ACA regulations. Examples could be not enforcing the individual and employer mandates, ceasing to defend the lawsuit challenging cost-sharing subsidies, or revoking or amending essential health benefits.
Proposed and pending regulations could also be stopped and never take effect, like rules on opt-out payments related to the Cadillac tax.
MSEC will continue to update you on the twists and turns of the ACA and will advise members if any changes are made. Until then, continue to operate your health plans in conformance with the existing ACA regulations, and proceed with currently required IRS filings in early 2017.