“I hope I have input, yes, ma’am.”Even after HHS nominee Tom Price’s four-hour grilling at yesterday’s Finance Committee confirmation hearing, it’s still unclear how much influence he’ll have on President Trump’s ACA replacement plan. In fact, focus seems to be moving away from the Price plan on Capitol Hill. Since last week, there are two new plans being floated—the Cassidy/Collins plan and the (Rand) Paul plan. So we now have five plans on the table (Ryan, Hatch, Cassidy, Paul and Price). Every plan we’ve seen hits the tax exclusion for employer-sponsored insurance but there is no leading plan at the moment. This current chaos threatens major unintended consequences if one of the repeal plans (pick one, any one) gets slammed through without debate. Our anxiety level is high, mostly because we know that ACA repeal and replace is the first order of business for the Ways and Means Committee, which intends to move fast. If the process that was used to pass the ACA is any indication, whatever emerges as the leading plan in the House will pass swiftly. We believe the Senate Finance Committee, by the way, is our real hope for a loud debate on the future of ESI, and we continue to work with committee members and stakeholders to oppose any new taxes on it. More to come. |
Q&A with Joel WoodOur phones have been ringing off the hook from reporters eager for insight. Here’s an excerpt of Joel Wood’s latest interview. How soon will the employer mandate to be addressed? I would expect mandates to be addressed in reconciliation as they were addressed in the bill that Obama has already vetoed – elimination of penalties as opposed to outright repeal, which couldn’t currently get to 60 votes. What do you expect a rollback of the employer mandate will do to employers’ decisions? Will we see more robust HC benefit offerings in light of the improved employment situation? We’ll continue to see higher-deductible plans as employers try to cope with rising benefit costs, particularly on the prescription drug front and specialty drugs. As for more robust offerings, we’ve always believed in the core drivers to ESI – the need for good employers to recruit and retain good employees. Tighter labor markets only underscore that reality, but federal policies will influence those benefit offerings in the future. Most of the guts of the ACA have to do with the individual market, the exchanges and Medicaid. We’re fine with Congress figuring out how to deal with those markets, but there can be intended and unintended consequences for the 170-million-plus Americans whose health insurance is provided by their employer. What do brokers need to be communicating to employers about the tax implications of various Republican replacement plans? If they do cap employers’ tax exclusions, do you see this immediately translating to higher take home pay for workers, or will there be a delayed effect to that end? With respect to all the reporting requirements, brokers advise clients to scrupulously comply with the law until the law is rescinded either through legislation signed into law or clear executive mandate on non-enforcement. As for proposals to exchange the Cadillac Tax for some sort of limitation on the employer exemption from taxation, our worry isn’t so much about taxation occurring directly on employers. Securing health insurance is a business expense. The worry is on taxation of the employee contributions. Sen. Hatch has suggested doing so on the basis of scaling back the percentage of the deduction. Speaker Ryan’s Better Way plan suggested something like a tax on the 1-percenters, based on income. Rep. Price’s past plan would have limited deductibility based on the cost of the plan itself. But any of these approaches could be seen as a tax increase in my book, and whether that’s immediate or down the road, it could create a political backlash.
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