Earlier this month the Supreme Court issued its decision to uphold the ACA, dismissing the challengers who asserted it was unconstitutional. So, what happens next?
Now that the healthcare law is out of harm’s way for the foreseeable future, we thought it best to comment on Biden’s current ACA advancements and forecast where the administration will focus its priorities moving forward.
It has been made clear in the last six months that the current administration is focusing on strengthening the ACA. Since first taking office in January, Biden created a special enrollment period that allows for individual enrollment through ACA health exchanges (currently slated through Aug. 15), expanded Premium Tax Credit eligibility, suspended PTC repayments, and introduced significant changes to COBRA coverage.
Moving forward, the administration is making strides to make permanent some of these advancements. Biden’s American Families Proposal (AFP), for example, includes provisions that make the PTC expansion enduring. Specifically, the proposal would allow Americans with income up to 150% of the Federal Poverty Level (FPL) to be able to obtain ACA coverage for $0 monthly premiums and individuals who earn 400% and beyond the FPL to obtain coverage for no more than 8.5% of their monthly household income.
These changes to PTC eligibility were introduced as part of the American Rescue Plan and have already garnered higher ACA enrollment than ever before. Currently, the PTC expansion only applies through 2022, but we can expect Biden and the House to continue to push for this.
An area that may also be a focus for the administration relates to the expansion of Medicare and Medicaid. Currently, only 12 states have not expanded Medicaid eligibility. Biden introduced incentives for states by offering temporary federal funding to help them implement the expansion. According to the Kaiser Family Foundation, 4 million Americans would become eligible for Medicaid if the 12 remaining states expanded their programs, with 1.4 million in Texas and nearly 800,000 in Florida.
Also included in the expansion of Medicare initiative are provisions around changing the criteria for qualifying and the types of services it would provide. “Many on the left, including Sen. Bernie Sanders, I-Vt., and the Congressional Progressive Caucus, are coalescing around lowering the Medicare eligibility age below 65,” according to a post by NBC News, adding “and broadening the program’s benefits to include vision, dental and hearing.”
Last month, 156 members of the House of Representatives signed a letter requesting Biden to lower the Medicare eligibility age to 60, decrease the cost of prescription drugs, and expand coverage to include vision, dental, and hearing, according to a post by The Hill.
Now that the ACA’s path forward is clear, we anticipate these changes to be a top priority for the administration.
A healthcare topic of discussion that has fallen off, however, is the federal public option. Despite having campaigned on a public option, Biden has left details regarding a government-run health insurance agency out of his future budget. It appears at this time, Biden’s priorities have been focused on making healthcare more accessible to Americans while tending to the COVID-19 pandemic. A post by CNN politics notes that “Instead, the President has focused on providing more generous federal subsidies for Obamacare policies, which may minimize the urgency to enact public option plans.”
The ACA is receiving the highest public acceptance it has ever received in its 11 years of existence and the future of the healthcare law has never looked so stable. Employers that may have been forgoing their compliance requirements of the Employer Mandate should revisit their processes to ensure they are tight-nit, as Biden’s ACA advancements also include increasing IRS enforcement of the law. The FY22 discretionary request, for example, includes $1 billion in additional funds for IRS enforcement efforts.
Under the ACA’s Employer Mandate, Applicable Large Employers (ALEs), or employers 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.
The IRS is now sending Letters 5699 for the 2019 tax year to employers identified as having failed to file and or furnish Forms 1094-C and 1095-C. As a reminder to employers, Letter 5699 is the precursor to Letter 226J, which the IRS is currently issuing for the 2018 tax year.
If your organization needs assistance meeting the requirements of the ACA’s Employer Mandate, we invite you to download the 2021 ACA Essential Guide for Employers.
This guide covers the requirements your organization must comply with, best practices for minimizing IRS penalty risk, important ACA deadlines, and steps for implementing a successful ACA compliance process. If you need assistance meeting these requirements, contact us to learn about ACA Complete.
For information on ACA penalty amounts, affordability percentages, important filing deadlines, steps for responding to penalty notices, and best practices for minimizing IRS penalty risk, download the ACA 101 Toolkit.