Health Care Reform Legislation Comparison
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Shared Responsibility
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ACA |
AHCA |
BCRA
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Employer Mandate |
Applicable large employers (those with 50 or more full-time employees and equivalents) face penalties if minimum essential coverage not offered to 95% of full-time employees (and dependents) or if coverage is not minimum value or affordable. |
No penalties for failing to provide adequate coverage. |
No penalties for failing to provide adequate coverage. |
Individual Mandate |
Individuals subject to tax if not enrolled in minimum essential coverage unless exception applies. |
No tax for failing to enroll in minimum essential coverage. However, effective for plan years beginning in 2019, a 30% premium surcharge would be charged by insurance carriers to an individual who purchases insurance coverage following a lapse in coverage of 63 days or more. |
No tax for failing to enroll in minimum essential coverage. However, individuals who have a lapse in coverage of 63 or more days in the prior 12-month period will be subject to a 6-month coverage waiting period. |
Reporting |
IRC §§ 6055 and 6056 require reporting from issuers of minimum essential coverage and applicable large employers. |
No change to ACA reporting requirements under IRC §§ 6055 and 6056. Additional Form W-2 reporting required. |
No change to ACA reporting requirements under IRC §§ 6055 and 6056. |
Market Reforms
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ACA |
AHCA |
BCRA
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Dependent Coverage |
If dependent children covered, coverage must continue until age 26. |
No change. |
No change. |
Essential Health Benefits |
Small group and individual market plans must cover 10 essential health benefit categories, as defined by benchmark plan established by state. |
No change, but states can apply for waiver to establish separate definition of essential health benefit. |
No change, subject to relaxed waiver rights under ACA § 1332 (State Innovation Waivers). |
Annual/Lifetime Dollar Limits |
No annual or lifetime dollar limits can be applied to essential health benefits. |
No change, but states can apply for waiver to establish separate definition of essential health benefit. |
No change, subject to relaxed waiver rights under ACA § 1332 (State Innovation Waivers). |
Out-of-Pocket Maximums |
Out-of-pocket maximum applied to essential health benefits. |
No change, but states can apply for waiver to establish separate definition of essential health benefit. |
No change, subject to relaxed waiver rights under ACA § 1332 (State Innovation Waivers). |
Preexisting Condition Exclusions |
Preexisting condition exclusions prohibited. |
No change, but insurance providers must apply a 30% premium surcharge if individual has a gap in coverage of 63 days or more. |
No change, but 6-month waiting period applied if individual has a gap in coverage of 63 days or more. |
Preventive Care |
Preventive care covered without cost-sharing. |
No change. |
No change. |
Emergency Coverage |
Emergency room visit at an out-of-network hospital must be covered at in-network rate. |
No change. |
No change. |
Rescissions |
Coverage cannot be retroactively terminated except in cases of fraud or misrepresentation or for premium nonpayment. |
No change. |
No change. |
Summaries of Benefits and Coverage |
Short (8-page) disclosure of plan terms and glossary distributed on an annual basis. |
No change. |
No change. |
Enhanced Claims Procedures |
Claims procedures now require additional claims procedures and voluntary external review. |
No change. |
No change. |
Provider Nondiscrimination |
Cannot discriminate against a health care provider acting pursuant to state license. |
No change. |
No change. |
Section 105(h) Nondiscrimination |
Fully-insured employer-sponsored health plans cannot discriminate in favor of highly compensated individuals (not yet effective). |
No change. |
No change. |
Medical Loss Ratio |
Individual and small group plans must spend 80% of premium income on claims and quality improvement. Large group insurance plans must spend 85% of premium income on claims and quality improvement. |
No change. |
Applicable ratio determined by the state (effective for plan years beginning on or after January 1, 2019). |
Tax Reforms
|
ACA |
AHCA |
BCRA
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Cadillac Tax |
40% excise tax applied to cost of group health coverage exceeding threshold (effective January 1, 2020). |
Delayed until January 1, 2025. |
Repealed effective December 31, 2019, but to be reinstated effective January 1, 2025, |
Small Business Tax Credit |
Tax credit for premiums paid toward group health coverage available to small businesses. |
Not available for plans that cover abortion for plan years beginning on or after January 1, 2017; repealed for plan years beginning on or after January 1, 2020. |
Same as AHCA. |
Health FSA Limit |
Maximum contribution to health FSA set at $2,500 (subject to annual increases for inflation). |
Repealed effective January 1, 2017. |
Repealed effective January 1, 2018. |
HSA Distribution Penalty |
Penalty for HSA distributions used for non-qualifying medical expenses increased to 20%. |
Repealed effective January 1, 2017. Penalty would go back to 10% for HSAs and 15% for Archer MSAs. |
Same as AHCA. |
HSA Contribution Limits |
No change. |
Increased to match statutory out-of-pocket maximum for high-deductible health plans (effective January 1, 2018). |
Same as AHCA. |
FSA/HSA Reimbursements |
Health FSAs and HSAs cannot reimburse over-the-counter products without a prescription (excluding purchase of insulin). |
Health FSAs and HSAs can reimburse over-the-counter products without a prescription, effective January 1, 2017. |
Same as AHCA. Additionally, HSAs can be used to reimburse insurance premiums. |
Medical Expense Deduction |
Itemized deduction under IRC § 223 available for medical expenses in excess of 10% of adjusted gross income. |
Repealed effective January 1, 2017. Threshold would return to 7.5% adjusted gross income. |
Same as AHCA. |
Medicare Surcharge |
Additional 0.9% hospital insurance (Medicare) tax applied to high-earners. |
Repealed effective January 1, 2023. |
Same as ACA. |
Medicare Investment Income Tax |
Medicare tax of 3.8% applied to unearned income. |
Repealed effective January 1, 2017. |
Same as ACA. |
Health Insurance Tax |
Tax applied to insurance carriers based on premiums collected. |
Repealed effective January 1, 2017. |
Repealed effective January 1, 2018. |
Health Insurer Compensation Deduction |
No compensation deduction available to certain health insurance providers for compensation in excess of $500,000 paid to applicable individuals. |
Repealed effective January 1, 2017. |
Same as ACA. |
Medical Device Tax |
Excise tax of 2.3% imposed on manufacturer, producers and importers of medical devices. |
Repealed effective January 1, 2017. |
Repealed effective January 1, 2018. |
Branded Prescription Drug Fee |
Manufacturers and importers of branded prescription drugs are subject to an annual fee. |
Repealed effective January 1, 2017. |
Repealed effective January 1, 2018. |
Retiree Drug Subsidy |
Amount received under Retiree Drug Subsidy must be taken into consideration when determining prescription drug cost business deduction. |
Repealed effective January 1, 2017. |
Same as AHCA. |
Marketplace
|
ACA |
AHCA |
BCRA
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Marketplace Structure |
Individuals can purchase insurance coverage on risk-pooled Marketplace established by Federal or state government. Individuals purchasing coverage on the Marketplace may be eligible for cost-sharing subsidies and premium assistance. Plans available on Marketplace (“qualified health plans”) must meet certain cost-sharing and actuarial value levels (i.e., gold, silver, bronze plans). Qualified health plans must cover essential health benefits. |
Effective January 1, 2020, cost-sharing subsidies and premium assistance are repealed. Additionally, Marketplace plans are no longer required to meet cost-sharing and actuarial value requirements. Limited-scope, or catastrophic plans would be available. |
Marketplaces, including cost-sharing subsidies and premium assistance, remain intact with modifications.
Off-Marketplace insurance plans that are not ACA-compliance are permitted with certification that rating area contains gold, silver and premium ACA Marketplace plans. Off-Marketplace coverage would not be considered creditable coverage for purposes of determining whether 6-month delay applies.
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Cost-Sharing Subsidies and Premium Assistance |
Available to individuals with household income between 100% and 400% of federal poverty line. Age is not a factor in amount of subsidies or assistance available. |
For plan years beginning in 2018 and 2019, basic structure remains the same except that age and income are factors in the amount of cost-sharing subsidies and premium assistance that is available. No subsidies or assistance is available for qualified health plans that cover abortion.
Cost-sharing subsidies and premium assistance repealed for plan years beginning in 2020. Instead, advance tax credit available based solely on age.
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Available to individuals with household income between 100% and 350% of federal poverty line. Age is a factor in amount of subsidies or assistance available. |
Premium Rate Setting |
Small group and individual insurance markets may vary rates based only on certain factors, including individual or family coverage, community rating, age (3:1 ratio) and tobacco use. |
Age ratio increases to 5:1 beginning January 1, 2018. States may apply to waive ACA requirements and base premiums on health factors. |
Age ratio increases to 5:1 beginning January 1, 2018. State Innovation Waiver Program (ACA § 1332) requirements relaxed, giving states ability to waive many of the ACA’s market reforms. |