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Health Care Reform Weekly Roundup – Issue 7: July 14, 2017

All eyes are on the Senate at the moment as efforts to round-up support for the Better Care Reconciliation Act (BCRA) continue. Developments over the past week are summarized below.

  • On July 13, 2017, the Senate released a revised version of the BCRA in an effort to placate Senators who have been reluctant to support the legislation. From an employer and plan sponsor perspective, the changes to the BCRA are generally immaterial. They include retaining the Medicare tax on investment income, the additional Medicare tax on high earners, and the compensation deduction limit on health insurance executives. Additionally, the revised BCRA would allow health savings accounts to be used to reimburse insurance premiums.

Importantly, the revised BCRA includes the so-called “Cruz Amendment” (proposed by Senator Ted Cruz), which would permit carriers to offer non-ACA compliant health plans in a rating area as long as the ACA Marketplace in that area offers at least one qualified health plan at each of the gold, silver, and premium levels. This revision would generally allow younger, healthier individuals to purchase limited coverage at a lower cost. However, without that population in ACA Marketplace risk-pool, some have argued that the Marketplaces could further destabilize.

See our June 28, 2017 blog entry for a summary of the BCRA provisions relevant to employers and group health plan sponsors.  An updated comparison chart of the ACA, American Health Care Act, and BCRA can be found here.

  • Senator Lindsey Graham announced on July 13, 2017 that he is working with Senator Bill Cassidy on an alternative ACA replacement that focuses on giving states wide latitude to develop their own health coverage systems. Under this alternative, the individual and employer mandates under the ACA would be repealed.  The medical device tax would be repealed, but all other ACA-related taxed would continue.  Although the alternative proposed by Senator Graham states that the ACA’s prohibition of preexisting condition exclusions would remain, there is no indication how this proposal would treat other ACA market reforms.

© 2017 Proskauer Rose LLP.

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About this Author

Damian A Myers Labor and employment law attorney proskauer rose
Associate

Damian Myers is an Associate in the Employee Benefits, Executive Compensation and ERISA Litigation Practice Center, resident in the Washington, DC office.

Damian represents public and private companies on matters related to employee benefits and executive compensation including compliance with ERISA, tax, corporate and securities laws and regulations affecting employee benefit plans, programs and arrangements. He concentrates on all aspects of compensation and employee benefit programs, including the design, implementation, administration and funding of non-qualified retirement...

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