On Thursday, May 4, 2017, Republican leaders in the U.S. House of Representatives ushered through a vote on the American Health Care Act (AHCA) to repeal and replace various provisions in the Affordable Care Act (ACA). The legislation passed the House on party lines, 217-213, and now moves to the Senate for deliberation.
This vote comes a little over a month after Republicans pulled the proposed bill from consideration, as they did not have enough votes necessary to pass the proposed legislation. The Republicans made amendments to the bill to garner support from various factions within their party, in particular the conservative members of the Freedom Caucus.
What is the impact?
There is no impact at this point as we are still very early in the legislative process through Congress. The next step in the Senate involves the complex rules associated with budget reconciliation. Republicans have a majority of 52 to 48 in the Senate, with an additional vote by the Vice President in case of a tie. If the bill has no support by Democrats and loses the support of 3 Republicans, it would not pass under Budget Reconciliation rules. If the bill’s various provisions do not qualify under Budget Reconciliation, it would need 60 votes to pass. This complicated process will make the bill’s journey through the Senate more difficult. In addition, some Republican Senators have expressed concern with the legislation in its current form; this factor, combined with budget reconciliation hurdles, will almost certainly result in major changes to the bill. Any changes would need to be reconciled with the House, and ultimately both chambers would need to agree to the legislation in its final form.
On May 24, 2017, nearly one month after the passage of the AHCA in the House, the Congressional Budget Office (CBO) released an updated score of the legislation. The score reflected new amendments to the bill, allowing states through waivers to alter certain market reforms, such as modifying essential health benefits (EHBs) and allowing insurers to vary rates based on health status. Get more details on the updated CBO score.
It is unknown whether this legislation will make it through Congress, and, if it does, what it will contain. For now, the ACA remains in effect and employers are required to continue to follow the provisions, even those that the AHCA proposes to repeal. These provisions include the employer mandate (known as employer shared responsibility, or ESR), the individual mandate and employer filing requirements.
What should businesses do?
Although passage in the House is a necessary step in the process, this complex legislation is very much in its infancy. Until the law passes both chambers and is signed into law by the President, the ACA and its provisions (including ESR) remain in effect. Paychex will continue to monitor legislative developments and work with you to ensure you have the most up-to-date information and compliance support. With Paychex ESR Services and the support of our dedicated ACA team, you don’t have to do much of anything to stay aware and on the right side of the law!