Health Care Reform Weekly Roundup – Issue 1

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Efforts to repeal and replace the Affordable Care Act (“ACA”) are in full swing as the U.S. Senate considers whether to modify the House of Representative’s American Health Care Act (“AHCA”) or draft its own ACA repeal legislation.  In the meantime, employers and other plan sponsors are still required to comply with the ACA.  To keep our readers up to date, Proskauer’s Health Care Reform Task Force will monitor and report on health care reform developments on a regular basis.  In that regard, below is our first Health Care Reform Weekly Roundup.

This past week was generally quiet in terms of ACA repeal developments. However, there were a few developments under the ACA.

  • ACA Repeal Efforts. As we previously reported, the House of Representatives passed the AHCA and sent the legislation to the Senate for consideration. Almost immediately, Senators indicated that the AHCA would not be passed as written and that the Senate preferred to draft its own legislation. Nevertheless, it is likely that many components of the AHCA will find their way into Senate legislation. See our May 4th and March 9th blog entries for descriptions of the AHCA provisions most relevant to employers and plan sponsors.
  • ACA Affordability Percentage Adjustment. To avoid an employer shared responsibility penalty, the ACA requires that applicable large employers (i.e., generally those with more than 50 full-time employees and equivalents) offer minimum essential coverage that is affordable and has minimum value to their full-time employees. Under the statute, the affordability threshold is set at 9.5% of household income, but the IRS has issued regulations providing for alternative methods of determining affordability. The 9.5% threshold is indexed for inflation, with the 2017 threshold being 9.69%. The IRS recently issued Rev. Proc. 2017-36, which (among other things) set the affordability threshold for 2018. Interestingly, the 2018 affordability threshold will decrease to 9.56%. Employers and other plan sponsors should consider this lower threshold when determining employee contribution rates.
  • ACA Preventive Care Recommendations. The United States Preventive Services Task Force (“USPSTF”) recently issued two new recommendations regarding preventive coverage services. Under the ACA, non-grandfathered group health plans must cover preventive services without cost-sharing (this does not apply to out-of-network services). Among the various definitions of preventive services are those that the USPSTF recommends with an “A” or “B” rating. On April 25, 2017, the USPSTF gave a “B” rating to screening for preeclampsia in pregnant women. This recommendation would require non-grandfathered plans to cover without cost-sharing preeclampsia screening for plan years beginning on or after April 25, 2018. Additionally, on May 9, 2017, the USPSTF gave a “D” recommendation to thyroid cancer screening for patients who exhibit no symptoms of the disease. A “D” recommendation means that this screening does not need to be covered without cost-sharing.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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