This week, the president signed into law the Protecting Affordable Coverage for Employees (PACE) Act, which repeals a provision in the Affordable Care Act (ACA) forcing employers with 51 to 100 employees to change health care plans by requiring them to purchase insurance with additional mandates in 2016, ultimately leading to higher premiums. This change was making the insurance market more expensive and healthy employers were forced to consider pulling out of the marketplace and self-fund their insurance. More information can be found at the 50-100 Coalition, which AGC is a member of.
The PACE Act is an example of a rare, bipartisan development in Congress and is especially unique in that it made a structural reform to the ACA that the president ultimately signed into law. The PACE Act was urgent and timely as employers prepare for the 2016 plan year. However, the legislative change leaves open the possibility that some states may choose to use the definition of small market as less than 100 employees because they had streamlined their state systems to the original ACA definition. While this definition may mute the benefits of the PACE Act in these states, the act shows a shift in Congress and by the president to make structural reforms to the law that work for employers. To date, there have only been a handful of changes to the ACA that were signed into law.
The Republicans in Congress are now looking at using a budget maneuver, reconciliation, to pass legislation that would repeal the employer and individual mandates under the ACA; repeal the medical device tax; repeal IPAB; eliminate the excise tax on high cost employer-sponsored health coverage (“Cadillac Tax”); and repeal auto enrollment. These efforts are unlikely to be signed into law; however, there are legislative attempts with bipartisan support that could see a path forward in the coming months. Some of the bills with AGC’s support include: changing the definition of a full-time employee, relief from employer reporting requirements, and repeal of the Cadillac Tax, to name a few.
For more information, please contact Jim Young at youngj@agc.org or (202) 547-0133.