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Transcript of NAHU_MMB_Mar2018_032818
In Washington, D.C.
NAHU Advocacy to Influence Cadillac/excise Tax Repeal
Association Health Plans
Preserve the employer exclusion
The employer-based system is highly efficient at providing
American workers and their families with affordable coverage
options through group purchasing and its associated economies
of scale by spreading risk and avoiding adverse selection.
The success of this system is possible because of the preferential tax treatment of employer-sponsored insurance coverage, where employer-paid contributions for an employee’s health insurance are excluded from that employee’s compensation for income and payroll tax purposes.
Proposals that would cap the maximum value of the exclusion or
eliminate it altogether would be detrimental to the stability of the
employer-based market and would negatively affect middle-class
Americans who currently benefit from this provision.
Taxes & Other Repeals
Repeal the Health Insurance Tax
Permanently eliminate the national premium
tax (HIT) that will add more than $500 annually
in costs to a typical family policy, with the
total cost in 2016 of $11.3 billion.
| Reps. Kristi Noem (R-SD)
and Kyrsten Sinema (D-AZ)
Taxes & Other Repeals
Repeal the Excise/Cadillac Tax
Permanently repeal the “Cadillac Tax,” which will impose a 40% excise tax on health plans that exceed certain cost thresholds beginning in 2022, following the delays passed in December 2015 and January 2018.
| Reps. Mike Kelly (R-PA)
and Joe Courtney (D-CT)
| Sens. Dean Heller (R-NV)
and Martin Heinrich (D-NM)
Senator Bernie Sanders (I-D-VT)
, a "Medicare for All" single-payer legislation.
A record 16 Senators
signed on as co-sponsors.
With Marcy M. Buckner
Vice President of Government Affairs
Marcy M. Buckner
Vice President of Government Affairs
Executive Order Directs Regulatory Action
President Trump signs executive order directing federal agencies to reinterpret ERISA to expand the availability of association health plans (AHPs), short-term limited duration insurance (STLDI) policies and Health Reimbursement Arrangements (HRAs)
60 Days for DOL to propose regulations or revise guidance
60 Days for all agencies to propose regulations or revise guidance
120 Days for all agencies to propose regulations or revise guidance
180 Days for HHS, Treasury, Labor and the Federal Trade Commission to report on state and federal laws, regulations and policies that limit healthcare competition and choice
The order does not immediately trigger any of these provisions but establishes a specific timetable for the Departments of Labor, Treasury and Health and Human Services to consider proposing regulations or revising guidance and report to the president on the feasibility of enacting such provisions.
Modifies the definition of “employer” under ERISA regarding AHPs that can sponsor group health coverage.
Be in the same trade, industry, line of business, or profession;
Have a principle place of business within a region that does not exceed the boundaries of the same State or the same metropolitan area (can cross state lines)
Groups or associations sponsoring the AHPs must be bona fide employment-based associations
Self-employed individuals/sole proprietors are permitted to take part in associations
226J notices to employers with preliminary penalties owed for tax year 2015 are going out before year-end
For calendar year 2015, the amounts are $2,080 and $3,120.
Employers must respond within 30 days, telling the IRS whether they agree or disagree with the assessment.
If the employer agrees with the findings in the letter he must complete, sign and date the
It must be sent by the date indicated on the first page of the letter.
Payment should accompany the letter or it may be paid electronically.
An employer that disagrees with the IRS’ assessment must also complete
There must be a signed statement explaining the areas of disagreement.
Documentation supporting the statement must be provided.
Employers providing added documentation should indicate this by entering a check in the column on the Employee PTC listing titled “Additional Information Attached.”
The IRS will reply with an acknowledgment letter following the employer’s response that provides their final determination.
If the employer does not respond within the time frame the IRS will send a Notice and Demand for the proposed amount in the letter 226J. The amount will be subject to IRS lien and levy enforcement actions. Interest will also accrue from the date of the Notice and Demand and continue until the amount due is paid.
Note that the ESRP is
for income tax purposes.
Employers should keep a copy of the letter and any documents that are submitted to the IRS.
Drastically reduces the top corporate tax rate from 35% to 21% effective in 2018; top rate for individual taxes would be lowered from 39.6% to 37% with standard deductions doubled.
ACA’s individual mandate penalties to obtain health insurance would be eliminated beginning in
The medical-expense deduction would be retained and temporarily expanded for two years by reducing the threshold to 7.5% of AGI, the level that was set prior to the enactment of the ACA.
Does not address the health insurance (HIT) and Cadillac/excise taxes.
Does not address employer exclusion of health insurance.
Streamline the Reporting Process
Establish a new voluntary reporting system, reduce the number of individuals and amount of information that would need to be reported, and eliminate the requirement to collect dependent social security numbers.
| Reps. Diane Black (R-TN)
and Mike Thompson (D-CA)
| Sens. Mark Warner (D-VA)
and Rob Portman (R-OH)
Full Time Definition
Restoring the 40-Hour Workweek
Repeal the 30-hour threshold for full-time employee for purposes of the employer mandate in the ACA and replace it with 40-hours.
| Reps. Jackie Walorski (R-IN)
and Dan Lipinski (D-IL)
| Sens. Susan Collins (R-ME)
and Joe Donnelly (D-IN)
Are We Going?
How You Can Get Involved
Email/call your federal representatives
every Friday and the
Contribute to HUPAC:
Support legislators who
fight for agents and brokers and the employer-based system
As new changes come to health reform, let us help you be their resource
How You Can Get Involved
You Can Do
FY 2017 Reconciliation vehicle expired 9/30/17
FY 2018 Reconciliation vehicle used for tax reform
FY 2019 Reconciliation vehicle is now available
to pass the AHCA, with additional amendments including a state flexibility amendment and additional high-risk pool funding.
20 Republicans defect.
rejecting the Health Care Freedom Act, a substitute amendment to the reconciliation bill (the "skinny repeal").
Three Republicans defect.
Senators Lindsey Graham (R-SC) and Bill Cassidy (R-LA) introduce reconciliation bill to relegate ACA powers to the states, following interest expressed by Senator John McCain (R-AZ), one of
the defectors from July.
Senate Majority Leader Mitch McConnell (R-KY) announces that the Graham-Cassidy plan will not be voted on, after three Republicans announce opposition.
Medical Loss Ratio
Exclude Broker Commissions from Formula
Remove independent agent and broker compensation from the definition of “administrative expense” from the Medical Loss Ratio (MLR) calculation.
| Reps. Billy Long (R-MO)
and Kurt Schrader (D-OR)
| Sens. Johnny Isakson (R-GA)
and Chris Coons (D-DE)
Delays ACA Taxes
CR signed into law by President Trump on January 22, 2018
Delays the Cadillac/excise Tax until January 2022
One-year moratorium of the Health Insurance Tax for calendar year 2019
Delays the Medical Device Tax until January 2020
Six-year extension of the Children's Health Insurance Program (CHIP)
Recent NAHU Comment Letters:
DOL Fiduciary Rule
Market Stability Rule
DOL Fiduciary RFI
CMS Regulatory Fixes RFI
Medicare Marketing Rule
Letter to Issuers
Long-term Care Guide
Medicare Contract Year 2019
Qualified Small Employer HRAs
Individual Market Stability
Sens. Lamar Alexander (R-TN) & Patty Murray (D-WA)
Sens. Susan Collins (R-ME) & Bill Nelson (D-FL)
Problem Solvers Caucus (40+ bipartisan house mem.)
Fully funds CSRs; establish reinsurance; employer mandate to 500+; full-time definition to 40 hrs; repeal medial device tax
Provides $4.5 billion in federal reinsurance funding over 2018 and 2019
Funds the CSRs through 2019; provides for greater flexibility for Section 1332 waivers, establishes a new “copper-level” plan and provides for additional federal funding on enrollment outreach.
C.R. signed into law by President Trump on February 9, 2018.
Funds federal government through March 23, 2018.
"Doughnut Hole" - pharmaceutical companies would be required to pay 75% of the cost of drugs in 2019, a year earlier than ACA requires.
Increases Part B & D premiums from 80% to 85% for individuals earning more than $500,000 and families over $750,000
Repeals the ACA's Indpendent Payment Advisory Board (IPAB), which would have recommended Medicare cuts
Cuts ACA's public health prevention fund by $12.7 billion
Extends CHIP funding four more years (through FY 2027)
Extends community health center funding for two-years
Provides $6 billion in opioid response funding over two-years
Short-term plans (STPs), also known as short-term limited-duration insurance (STLDI) plans are currently limited to a maximum of 3-months under a regulatory policy established by the Obama Administration in 2016.
Proposed rule issued February 20 would effectively end that policy and extend eligibility for STPs to 364 days (no more than 12 months), with the ability to renew coverage at the end of that period.
Coverage could only be renewed with consent of issuer, and consumer may need to undergo underwriting again.
Medicare - COBRA
COBRA as Creditable Coverage
Allow COBRA coverage to count as creditable coverage for Medicare beneficiaries just as
employer-sponsored coverage does. This will allow beneficiaries to have access to Part B on a timely basis without penalties for late entry into the program.
| Reps. Kurt Schrader (D-OR)
and Carlos Curbelo (R-FL)
Medicare - Observation Status
Allow observation stays to be counted toward the three-day mandatory inpatient stay for Medicare coverage of a skilled nursing facility.
| Reps. Joe Courtney (D-CT)
and Glenn Thompson (R-PA)
| Sens. Sherrod Brown (D-OH)
and Susan Collins (R-ME)
C.R. signed into law by President Trump on March 23, 2018.
Funds federal government through September 30, 2018.
Did not include language addressing any ACA market stability concerns.