January 2017 | Vol. I, Issue 4 | Center for Health

This periodic e-newsletter is provided to keep conference benefits officers and other United Methodist Church (UMC) employer representatives informed about the Affordable Care Act (ACA) and evolving health care landscape—and the impact on you as an employer/plan sponsor. Please share this Health Care Reform Update with church administrators and others in your annual conference or organization. Contact Wespath Benefits and Investments at healthcare_reformupdate@wespath.org with article ideas or if you would like to share your organization’s experience in a future issue. SPECIAL EDITION New Administration and Congress—Potential Scenarios With the transition to a new President and new Congress, there is much in the media about possible impacts to health care laws and regulations, leaving many in the UMC questioning how their health care strategies may be impacted. Wespath is monitoring the new developments, and is committed to providing information as it is relevant and useful to UMC annual conferences and employers. As part of this commitment to UMC relevance, we are carefully identifying legislative proposals and regulatory actions that move beyond just a conversation or possibility to a probability (e.g., passed by one house of Congress and likely to be passed by the other). At this time, there are multiple scenarios under consideration—many of which may never come to fruition. To provide insight and some context for the proposals discussed by the media, the following offers a brief overview of methods by which repeal of the Affordable Care Act (ACA) or significant change to ACA provisions might be achieved by the new Congress and Administration. At this time, however, no scenarios are definitive as we wait to see what actions President Trump and the 115th Congress will take in the weeks and months ahead. Key proposals under consideration may apply different legislative strategies toward Congressional approval: a budget reconciliation strategy or standard legislative process. 1. Budget reconciliation approach—The budget “reconciliation” process allows a bill to become law with only 51 votes in the Senate (i.e., a simple majority). Reconciliation bills are intended to be limited to provisions dealing with government spending or government revenues that have more than an incidental budget reduction impact. How budget reconciliation might be applied: Congress could repeal the ACA provision for premium tax credits (subsidies) to lower-income individuals who purchase policies on the public Exchanges. This could be passed with or without a delayed effective date. Since 80% of the individuals buying coverage on the Exchange receive subsidies, a repeal of this provision alone could have significant repercussions for the Exchanges as they currently exist. Additionally, Congress could apply the budget reconciliation process in order to repeal federal subsidies that have been provided for expanding Medicaid in the 32 states (plus D.C.) that chose to do so under the ACA. Last week, the House and Senate both passed a budget resolution that could lead to one or more bills repealing some provisions of the ACA through the budget reconciliation process. The next step is for certain committees to develop repeal proposals, which could lead to votes on specific bills. If signed by the President, these bills would then become law. 2. Standard legislative approach—Standard legislative approval requires 60 votes in the Senate (i.e., sufficient votes to override a filibuster by the minority party, if applicable). Thus, comprehensive legislation to significantly change or repeal ACA provisions (beyond spending changes) would require some Democratic support in the Senate, and thus would be likely to take significantly longer to be finalized. (Senate composition under the 115th Congress sworn in January 3 includes 52 Republicans, 46 Democrats and 2 Independents who caucus with the Democrats.) How the standard legislative process might be applied: This approach would be needed for a bill aimed at more significant changes than simply repealing ACA spending and/or revenue provisions. For example, this approach would apply to several pending proposals for more comprehensive legislation that would substitute a different mechanism to assist individuals obtaining coverage—instead of the ACA’s subsidies (i.e., instead of premium tax credits). One possibility is a law providing for a refundable tax credit for individuals who do not have employer-provided access to coverage. Representative Tom Price (R-GA) sponsored such a bill in the last Congress, and, given that Rep. Price has been nominated to head the Department of Health and Human Services (the agency tasked with the bulk of ACA oversight) some permutation of that bill may be introduced in the new Congress. Background: Several hundred Republican health care bills were proposed in the prior Congress. More information about the proposal from Speaker of the House Paul Ryan (R-WI), which also may form the basis for a House proposal to replace the ACA, is provided here. Summary: It is premature at this time to know how legislative proposals will affect conference/UMC employer health plans or the availability of health coverage through the Health Insurance Marketplace (i.e., ACA exchanges). Wespath continues to monitor legislative activity and will provide analysis and updates as more becomes known about the direction Congress and the new Administration will take. Return to Top Disclaimer: This e-newsletter is provided by Wespath Benefits and Investments as a general informational and educational service to its plan sponsors, the annual conferences, plan participants and friends across The United Methodist Church. It should not be construed as, and does not constitute, legal advice nor accounting, tax, or other professional advice or services on any specific matter; nor do these messages create an attorney-client relationship. Readers should consult with their counsel or other professional adviser before acting on any information contained in this newsletter. Wespath expressly disclaims all liability in respect to actions taken or not taken based on the contents of this newsletter. Copyright © Wespath Benefits and Investments, a general agency of The United Methodist Church Share your suggestions and comments about Health Care Reform Update