The U.S. Senate has released a new, updated draft of the Republican-proposed Better Care Reconciliation Act aimed at winning over Republican Senators who were not enamored of the initially proposed legislation. The GOP-controlled Senate needs 50 votes to pass the legislation through the reconciliation process that would repeal and replace the Affordable Care Act (ACA). None of the revisions are expected to receive the support of Democratic Senators.
One key item not addressed is reporting of employee information to the IRS as currently required by the ACA.
The initial and updated versions of the Better Care Reconciliation Act call for elimination of financial penalties under IRS Section 4980H for companies with 50 or more employees – referred to as Applicable Large Employers (ALEs) — that fail to offer 95% of their full-time employees minimum essential healthcare coverage that is affordable and that provides minimum value, as required by the ACA.
However, neither version of the bill changes the current reporting requirements for ALEs. The proposed legislation also leaves in place the financial penalties outlined in IRS Section 6721 and 6722 for failing to correctly file this information with the IRS. The IRS uses this information to administer the premium tax credit program.
It appears that regardless of whether the ACA is repealed or left intact, ALEs are going to need to continue to file employee data related to healthcare with the IRS for the foreseeable future, with financial penalties for failing to file being enforced. (see IRS Still Moving Forward with ACA Compliance Enforcement for Employers)
Here is a list of key changes contained in the updated version of the Better Care Reconciliation Act:
An additional $70 billion to encourage state-based healthcare reforms, bringing the total funding in the legislation to $82 billion.
Allowing Americans to use Health Savings Accounts (HSAs) to pay for healthcare insurance premiums.
An additional $45 billion to fund substance abuse and recovery.
A new option to make individuals who enroll in catastrophic healthcare plans eligible for tax credits as long as they meet other eligibility requirements for tax credits. This is not allowed under the ACA.
Maintains ACA taxes to the net investment income tax, the additional Medicare Health Insurance (HI) Tax, and the remuneration tax on executive compensation for certain health insurance executives.
Creates a fund for the purpose of making payments to health insurance providers to cover the costs of high-risk individuals enrolled in qualified health plans on the federal healthcare exchange. In order to qualify, healthcare insurers must offer sufficient programs that provide minimum coverage on the Exchange similar to current ACA requirements. These insurers would then be allowed to offer coverage off the Exchange that do not have to meet the minimum healthcare requirements currently mandated by the ACA.
A list of the bill changes can be found at this link.
An analysis of the revised bill from the Congressional budget office is expected next week.
In the meantime, a new proposal from GOP Senators Lindsay Graham of South Carolina and Bill Cassidy of Louisiana has surfaced. Their proposal would send revenue from some ACA-related taxes to the states to address healthcare issues. The senators also proposed repealing taxes on medical device makers and financial penalties for the individual and employer mandates.
While it is far from certain whether the updated BCRA will pass, what remains certain is that employer reporting obligations and their corresponding penalties remain.
We’re committed to helping companies reduce risk, avoid penalties, and achieve 100% ACA compliance. For questions about the ACA contact us here.
