June 27, 2017 Update from Washington: ACA Repeal and Replace Understanding the Impact of the BCRA Presented by: James Slotnick, JD Sun Life Financial AVP, Government Relations
Today s Agenda The Political Rhetoric Questions
Two very different views of the Affordable Care Act Republicans generally focus on Lower than expected enrollment on ACA exchanges Price increases on ACA exchanges Tax increases embedded in ACA Democrats generally focus on. ACA s impact on uninsured rate ACA s impact on Medicaid Tax fairness of the ACA
Today s Agenda The Political Rhetoric Questions
Employer Market Impacts Taxes & Fees Phased Out Individual & Employer Mandate.90% Medicare Surcharge on high income employees Cadillac Tax delayed Reporting requirements are NOT changed Changes would not meet Reconciliation requirements Administrative change possible outside of legislation
Employer Market Impacts Health Saving account changes Contribution limit to equal IRS maximum allowable deductible Over the counter drugs can be paid with HSA funds Penalty for non-approved HSA withdrawal reduced from 20% to 10% Lifetime and Annual Maximums remain in place Would a state changing their EHBs impact employer plan maximums?
Individual / Employer Market Impacts Section 1332 Waivers remain, but become easier to qualify for ACA 1332 Requirements Cover the same number of people as ACA Provide coverage as affordable as ACA Ensure coverage is a comprehensive as ACA Must not add to federal deficit BCRA 1332 Requirements Must not add to federal deficit Items to watch: Community Rating could a state go higher than 5:1? Essential Health Benefits could a state create their own list?
Individual Market Impacts Tax Credits remain in place Available if: Make less than 350% of Federal Poverty Level (ACA was <400% FPL) Not offered employer sponsored coverage Amount of tax credits available will be tied to less expensive plans Individual Mandate zeroed out 6 month waiting period if loss of coverage for more than 63 days Pre-existing condition protections remain in place Community Rating Changes From 3:1 to 5:1
Medicaid Impacts Reduce Federal reimbursement for Medicaid Expansion Gradually reduce to 57% reimbursement rate in 2024 Tie to normal Medicaid reimbursement rates Move to a per capita or block grant reimbursement model in 2025 Allow states to institute work requirements for certain Medicaid eligible individuals
Legislative Path Pass House Pass Senate Conference Committee Back To House & Senate President Trump
What To Watch For 1. Reaction to Congressional Budget Office s score Projected Medicaid spending reduction Projected impact on uninsured rate Projected impact on deficit 2. The Whip Count 5 Senators have said not yet Will votes in the House still be there?
Today s Agenda Behind The ACA s Numbers Questions
Thank you James R. Slotnick, JD 617-821-0804 james.slotnick@sunlife.com This communication is intended to provide general information only and should not be construed to be legal advice. Sun Life Financial, its distributors, and its respective representatives do not provide tax, accounting, or legal advice. Any tax statements made are not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Clients should consult their own independent advisors about any tax, accounting, or legal statements. 2016 Sun Life Assurance Company of Canada, Wellesley Hills, MA 02481. All rights reserved. Sun Life Financial and the globe symbol are registered trademarks of Sun Life Assurance Company of Canada. Visit us at www.sunlife.com/us. GGPPT-6376a SLPC 27936 11/16 (exp. 11/18)