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The inauguration welcoming president-elect Joe Biden to the White House is imminent and with the recent shift in majority control of the Senate, we can expect a number of advancements to the Affordable Care Act to follow.
With the recent Senate runoff race in Georgia resulting in victories for Democrats, a shift in control took place in the U.S. Senate, granting a majority to the Democratic party due to Vice President Kamala Harris’ role as the designated tie-breaker.
This new majority gives Democrats an edge in Congress and gives Biden a platform for passing key legislation. An area where we can expect to see significant advancements is in the healthcare space, particularly around the ACA. According to a post by ABC News, “Healthcare advocates familiar with Biden’s plan expect steps to shore up the Affordable Care Act will be included in the COVID relief bills that are the new administration’s first legislative priority.”
Already, Biden has proposed a $1.9 trillion COVID-19 relief plan that would increase Premium Tax Credit (PTC) amounts for Americans obtaining coverage through a state or the federal health exchange and put a 8.5% cap on health insurance premiums. The current cap for affordable care is set at 9.5% of a person’s income. This contribution is separate from the affordability threshold that employers set for their employees, but with more affordable healthcare being offered through the marketplace, we can expect to see an increase in enrollees. More enrollees mean a greater possibility for ACA penalties being issued by the IRS to employers who fail to offer coverage to employees.
It is possible that the Biden administration could push for advancements around the expansion of Medicare and Medicaid. Last summer Missouri and Oklahoma both passed expansions of healthcare programs as COVID-19 cases continued to spike across those states.
A total of 12 states have not yet expanded Medicaid and the Biden administration could possibly extend the ACA’s premium tax credits to residents of these states. While the move would not allow more Americans to enroll in Medicaid/Medicare, it could provide highly subsidized coverage through the states’ health exchange.
The Biden campaign has said that it would reinstate the federal Individual Mandate penalty, a move that would be largely supported, as many states have passed their own version of the law since the federal mandate was zeroed out. This move would force everyone in the U.S. to obtain health coverage that meets coverage and affordability standards or face a penalty. The reinstatement of the mandate penalty would undoubtedly cause more residents to enroll in coverage. This may cause more employees to choose to enroll in employer-sponsored health care plans.
As the COVID-19 pandemic rages on, healthcare continues to be a top concern for Americans and regardless of what moves come first once Biden takes office, we can be sure that advancements to the ACA are certain to take place.
Additionally, employers can expect continued enforcement of the Employer Shared Responsibility Provisions (ESRP), also known as the Employer Mandate.
Under the ACA’s Employer Mandate, Applicable Large Employers (ALEs) organizations with 50 or more full-time employees and full-time equivalent employees) are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is Affordable for the employee or be subject to Internal Revenue Code (IRC) Section 4980H penalties.
With ACA advancements on the horizon, employers should remain diligent in their efforts to provide quality healthcare to their workforces. Failing to do so could result in significant penalty assessments from the IRS. The agency is currently issuing Letter 226J penalty notices to employers that have failed to comply with the mandate for the 2018 tax year
