The Trump Effect and Business: Health Care Reform
There have been multiple efforts to repeal and replace various provisions of the Affordable Care Act in recent months. Senior compliance analyst Laurie Savage highlights some important details of these efforts with small business influencer Gene Marks.
Gene Marks: Hi, everybody. My name is Gene Marks. I'm here with Laurie Savage. I write for The Washington Post every day. And I write weekly online for a bunch of other places. Laurie is a senior compliance analyst at Paychex. Laurie is all about health care and health care reform. That is what takes up your life and your job. There's been a lot of talk, Laurie, about repealing the Affordable Care Act. Is that an easy thing to do?
Laurie Savage: Well, it's complicated. So, no. It's very complicated. And I think, first of all, just to frame it, this effort to reshape close to 18 percent of the GDP is hard in and of itself. But just outright repeal of the Affordable Care Act – because we hear a lot about it – is not a possibility under current rules of the Senate. So it's not an outright repeal. You talk about repealing various provisions, because they're subject to budget reconciliation rules. Because what the Republican Senators were attempting to do was to circumvent the filibuster, the famous filibuster where you need 60 votes to forward legislation to the floor. And what that basically does with budget reconciliation, it's very limited. You get a one-shot deal a year. So the current repeal and replace effort was built into the fiscal 2017 budget. And you can only use this once. So you can't just have multiple instructions on budget reconciliation to do tax reform, to do all of the other stuff. What that means is that you can only repeal provisions that directly impact spending, deficit reduction or revenue items. So it's budget, directly affecting the budget. So the ancillary items, such as rule-based, wouldn't fit under repeal.
So there never really was an outright repeal of the Affordable Care Act. Because right now, the Republicans only have 52 senators. So they don't have the 60 to go over the filibuster.
GM: So what I'm taking away from this is that there can't be an overall repeal. It has to come in smaller parts, to take away certain parts of the legislation that gets funding. And then I guess the budget itself cannot fund certain key parts of the Affordable Care Act, which would take away a lot of its teeth?
LS: Well, again, appropriations are subject to regular rule, though. So you still have to get your 60. How you're going to get your eight Democrats aboard if you're just going with a blunt instrument and slashing it? And we always get to that crux point's happened a lot of time in the past few years where we've come to the point of the budget where we almost shut down the government.
GM: So when President Trump says, we need to repeal the Affordable Care Act, when people in the Senate and the House are saying, we need to repeal it, what exactly then would happen? There is no bill that can be signed. What do you envision that they mean when they say repeal?
LS: They're talking about mostly the taxes. And that was included in the original draft of the Senate and the House legislation on the repeal and replace when they put together their plans. The bulk of the taxes were slashed. Now that is a direct impact on budget. Taxes are a lot easier to fit in that. It's the rule-based stuff, such as how you structure the underwriting rules in the small business market, and how you structure the various guaranteed availability, the essential health benefits. Those other market-based rules are really – they're a lot harder to get under that budget reconciliation umbrella.
GM: A big issue with businesses is the shared employer responsibility, that we have to provide health care insurance if we have more than 50 full-time equivalent employees, provide it to our full-time people. How does that get repealed?
LS: Well, and that's the interesting thing. Even in the two versions of the bill, they never actually put in a provision to outright repeal either the employer shared responsibility or the individual shared responsibility. What they did is zeroed out the assessment amounts. And people were opining that that was due to the budget reconciliation rules. And the funny thing about that is all the filing requirements remain. So even if you go forward, and let's say, we go with an outright repeal, you would still have the law existing on the books for employer shared responsibility. Obviously, it wouldn't have any teeth if there was no assessment at the end. But the filing requirements would still exist and are still somewhat necessary for the premium tax credit. And they are subject to penalties in and of themselves similar to the W-2 penalties.
GM: It sounds like a huge, complicated mess that affects, like you said, 18 percent of our economy. So again, my takeaway is, if you're running a business, you're an HR manager, a small business or even a mid-sized business, this is going to take a long time to unwind. If a repeal does take place, we're going to have to keep an eye on what's going on in Washington and rely on our experts at Paychex to kind of advise us along the way. Laurie, thank you very much. It's very helpful.
LS: Thank you