Proposed Farm Bill Another Attempt to Undermine ACA

3 minute read: It’s well known that the Trump administration is doing all it can to undermine the Affordable Care Act. The recent decision by the federal Justice Department to refrain from defending the healthcare law to challenges in federal court is just one of a series of administrative actions undermining the ACA even as it has grown in popularity among the American public. Congress, unable to repeal the ACA, has done its part to undermine the law, most notably by reducing the penalty for the ACA’s individual mandate to $0 as part of tax reform legislation, essentially repealing the individual mandate starting in 2019. Some Republican members of the U.S. House of Representatives continue to keep the fight alive. The latest salvo is the proposed Farm Bill. Every five years the farm bill expires and is revised for necessary changes and updates. The bill is impressive in length and addresses some important agricultural issues. It also includes language that would allow farmers access to less expensive but also less comprehensive health care options than required by the ACA, consistent with the Trump administration's push for more association health plans (AHP). AHPs provide lower cost but less comprehensive healthcare coverage than required by the ACA. In the proposed bill, U.S. Department of Agriculture (DOA) has requested millions of dollars in loans to implement a healthcare system specifically designed for agriculture-related organizations. The DOA would implement AHPs that although are less expensive but less robust and purportedly more in line with what it believes farmers want. While it may appear to be a solid alternative to alleviate the burden of costly healthcare for farmers, others believe the passage of this type of association health plan would negatively impact the structural integrity of the ACA, and that may be the real point of the healthcare provision of the bill. The National Association of Insurance Commissioners, for instance, have voiced concern surrounding the effects on “the stability of the small group market” as the farm bill will “provide inadequate benefits and insufficient protection” to consumers. And as Sabrina Corlette, a professor and project director at the Georgetown University Health Policy Institute, told Kaiser Health News: “I don’t know that anyone at the Department of Agriculture, with all due respect, knows a darn thing about starting and maintaining a successful insurance company.” The continued focus on association health plans by the Trump Administration and House Republicans demonstrates their willingness to do what they can to undermine the ACA recognizing that they cannot gather enough votes for outright repeal. Their efforts have already created a backlash in some states, with New Jersey and Vermont already passing state-wide individual mandates to take the place of the ACA’s individual mandate when it effectively ends in 2019. And while some business organizations continue to protest the ACA’s employer mandate, no meaningful legislation appears to be in play in Congress. In the meantime, the IRS continues to take steps to enforce the ACA’s employer mandate, having issued $4.3 billion in penalty assessment to date to organizations it determined did not comply with the ACA in 2015. The agency is gearing up to issue Letter 226J penalty notices to organizations that have failed to comply with the ACA in 2016 once all the notices for 2015 have been issued. If your organization has received Letter 226J along with a hefty penalty assessment for 2015, see the infographic below on how to respond. Under the ACA’s employer mandate, applicable large employers (ALE’s) or organizations with 50 or more full-time employees and full-time equivalent employees are required to offer minimum essential coverage to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets minimum value and is affordable for the employee or be subject to IRS 4980H penalties. If your organization fits the IRS description of an ALE and have not yet filed information with the IRS, you should consider doing so right away because the penalties are adding up. If your organization has filed the required information with the IRS each year since 2015, it might be worth considering a spot audit of your 1094-C and 1095-C forms to determine your potential penalty exposure. Some third-party vendors with ACA expertise will offer this service at no charge. If you thought the employer mandate was going away, you may want to reconsider. Failing to comply with the responsibilities under the Employer Shared Responsibility Provisions could subject employers to penalties proposed in the IRS Letter 226J. Is that a risk your organization wants to take? As the IRS continues to roll out its enforcement efforts, the answer more and more should be no.

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