HEALTH REFORM ADVISORY PRACTICE Lockton Benefit Group “What the Health Reform is Going on Out There?” Click the logo to register January 6, 2017 Edward Fensholt JD, Mark Holloway JD, Scott Behrens JD LOCKTON COMPANIE S Please Note The audio portion of this presentation will be broadcast through your PC. Please DO NOT attempt to dial in to the webcast on your telephone. 1 1 Volume Too Low? Please make sure your computer is not muted and the volume bar on the Audio Broadcast Panel is all the way up. If the volume is still low, please adjust your Master Volume Settings. To do this, double-click on the Volume Button on the lower corner of your tool bar, and make sure the volume is moved all the way up. If you are listening from a headset, please make sure the volume slider on the cord is turned all the way up. 2 2 Haven’t Received Your Handouts Yet? Some spam filters intercept messages sent from our group mail server. 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Ask them on Twitter: #LocktonClass Follow us on Twitter @LocktonComply and @LocktonBenefits 4 4 HEALTH REFORM ADVISORY PRACTICE Lockton Benefit Group “What the Health Reform is Going on Out There?” January 6, 2017 Edward Fensholt JD, Mark Holloway JD, Scott Behrens JD LOCKTON COMPANIE S Agenda Welcome, Introductions and Acknowledgements It’s About to Go Down: Procedures for Repeal and Replace or Delay The ACA Repeal Legislation The Replacement Plan Other Things (time permitting) Conclusion and Questions s:\filepath 6 It’s About to Go Down: Procedures for Repeal and Replace or Delay Repeal and Replace? Repeal and Delay? Unable to quickly agree on a replacement plan, and pressured by a perceived mandate to repeal the ACA, Republicans appear to have “I don’t think repeal is decided on repeal and delay. that complicated. We’ve done that once . Repeal and replace is still in play. Key senators are fighting for it, but When it comes time to repeal and delay seems much more replace . that’s realistic. complicated.” Sen. Tom Cotton (R-AR) Sen. Rand Paul (R-KY) Sen. Lamar Alexander (R-TN) Sen. John Thune (R-SD) Sen. Susan Collins (R-ME) 8 What ACA Repeal and Delay May Look Like By Feb. 20, 2017 By Dec. 31, 2017 By 2019 or 2020 Target for passing repeal, but Target for passing ACA rules sunset, ACA rules replacement, but ACA rules replacement fully effective stay on the books stay on the books Some repeals become Some ACA repeals and some effective. Executive action to replacement rules modify ACA provisions and may go into effect earlier stabilize insurance markets Other legislative and executive action to smooth the transition 9 Mechanic for Accomplishing Repeal The House can pass repeal legislation by simple majority (which Republicans have), but the Senate needs 60 votes to overcome a filibuster. Republicans have 52 Senate seats and Democrats say they won’t help repeal. Some vulnerable Democrats up for reelection in 2018, like Joe Manchin (D-WV) might help, but not likely eight. Are we headed for a filibuster and a stalemate? Not if budget reconciliation is used, which requires only 51 votes in the Senate. 10 How Reconciliation Works Reconciliation allows current law to be changed to meet the objectives of the proposed budget. Reconciliation bills can only change Spending Revenue (i.e., taxes) Debt limit The limits on reconciliation are why changes to the ACA’s “market reforms” like the prohibition on preexisting conditions and elimination of annual limits probably can’t be reversed during repeal. These ACA rules have only an incidental impact on the budget, so they likely cannot be changed via reconciliation. 11 Proposed Timeline for ACA Repeal Through Reconciliation Budget Committee finalizes repeal bill to be voted on Final bill sent to by full House and president for Senate signature (20 Hours of debate in the Senate followed by vote-o- rama on a flurry of House adopts amendments) 5 rules limiting debate and amendments (Senate rules Senate and pre-established via 4 House Byrd Amendment) committees formulate and report proposed 4A changes to the If House and Senate Budget Committee 3 pass different bills, then conflicts are resolved in Adoption of conference committee budget resolution with reconciliation language for 2 4B specific committees Repeat steps 3 & 4 if necessary 1 Senate Completed In Progress; In Progress Jan. 4 Goal is early/mid Feb. Goal is Feb. 20 Jan. 3 (S. Con. Res. 3) due Jan. 27 (H. Res. 5) 12 Process for Replacement It all depends on what cooperation Republicans get from Democrats If Republicans can get Democrat support, then “regular order” – the normal legislative process – will be used More hearings, lengthier debate, and greater potential for amendments Vulnerable Democrats in traditionally Republican states up for reelection in 2018 may be key If Republicans cannot get Democrat support, then a second budget reconciliation process will have to happen Normally, budget reconciliation can happen only once per year, but delays in passing a budget resolution in 2016 means they can pass two in 2017. Republicans will be constrained to non-incidental changes to revenue and spending Replacement might happen through both—reconciliation for tax-related matters (maybe as part of broader tax reform) and regular order for non-budget matters like market reforms (e.g., selling insurance across state lines) 13 Senate: Key Committees and Presumptive Chairs Budget—Drafts the budget resolution and helps formulate and oversee the reconciliation process Chair: Michael Enzi (R-WY) Finance*—Oversees taxation and revenue as well as government funded health programs. Chair: Orrin Hatch (R-UT) Chair Health Subcommittee: Pat Toomey (R-PA) Health, Education, Labor, and Pension*—Jurisdiction over public health policy. Chair: Lamar Alexander (R-TN) Chair Health Subcommittee: Michael Enzi (R-WY) Appropriations—Provides legislation allocating funds to administrative agencies in line with the budget. Chair: Thad Cochran (R–MS) Chair Subcommittee for DOL and HHS oversight: Roy Blunt (R-MO) *Committees given jurisdiction over reconciliation/repeal language by the current budget resolution 14 House: Key Committees and Presumptive Chairs Budget—Similar to the Senate, drafts the budget resolution and helps formulate and oversee the reconciliation process Chair: Diane Black (R-TN-06) Energy and Commerce*—Broad jurisdiction over public health (including insurance) and commerce Chair: Greg Walden (R-OR-02) Chair Health Subcommittee: Mike Burgess (R-TX-26) Ways & Means*—The Constitution requires all tax bills start here Chair: Kevin Brady (R-TX-08) Chair Health Subcommittee: Pat Tiberi (R-OH-12) Appropriations—Similar to Senate, provides legislation allocating funds to administrative agencies in line with the budget Chair: Rodney Frelinghuysen (R-KY-05) Chair Subcommittee for DOL and HHS oversight: Tom Cole (R-OK-02) Education and Workforce—Oversees employment related legislation including healthcare Chair: Virginia Foxx (R-NC-5) Chair Health and Labor Subcommittee: Phil Roe (R-TN-1) (introduced replace bill) *Committees given jurisdiction over reconciliation/repeal language by the current budget resolution 15 The Affordable Care Act “Repeal” Bill: What Will Change and What Won’t? Background – ACA Repeal Since the ACA’s inception in 2010, House Republicans have passed dozens of ACA repeal bills Some never saw daylight in the Senate; all that cleared the Congress were vetoed by President Obama Latest attempt was a HR 3762, a reconciliation bill sponsored by Rep. Price (R-GA) that was vetoed by President Obama in December 2016 Rep. Price is President-elect Trump’s designee for Secretary of HHS We will assume HR 3762 will serve as the blueprint for a repeal bill for the Congress in 2017 Possible that repeal of Cadillac Tax and Medical Device Tax will be done with stand-alone bills Why? Republicans continue to discuss effective date(s) for repeal Dates used on forthcoming slides may change s:\filepath 17 ACA Repeal – What It May Look Like House Republicans’ prior repeal bill, HR 3762, is 8 pages in length, compared to 900+ pages of the ACA as enacted Repeal bill uses multiple references to “Effective as of [date], this Section [of the ACA] shall have no force and effect” Very few references to outright repeal of ACA provisions Many unanswered questions right now Bill would also resurrect some prior rules that were changed with ACA’s enactment in 2010 More on that in a few moments Goal is to have a repeal bill passed by both houses and on the President’s desk for signature by February 20 After inauguration on January 20, Executive Orders might be used to derail some ACA provisions prior to outright repeal Q: ACA reporting? s:\filepath 18 ACA Repeal – Employer and Individual Mandates Employer Mandate: Reduces to $0 any penalties that would apply to employers for not offering coverage to ACA FTEs Applies retroactively to 2015 (first year in which employer mandate applied) Effectively kills ACA regulatory regime for counting hours to determine FTE status What about ACA tax reporting? Individual Mandate: Reduces to $0 any penalties that would apply for not maintaining