Health Reform Bulletin 130 | Senate Releases Health Care Reform Proposal

Subject: Senate Releases Health Care Reform Proposal
Date: June 23, 2017
The Senate has now made public its health care reform bill, named the “Better Care Reconciliation
Act of 2017”. In many ways, it tracks the House bill passed on May 4, 2017 (see the CBIZ Health
Reform Bulletin 128 – House Passes the American Health Care Act, 5/5/2017).
In effect, both House and Senate bills would repeal most of the Affordable Care Act (ACA) taxes, with
the exception of the so-called Cadillac tax, an excise tax imposed on high cost health coverage.
According to both bills, the imposition of the Cadillac tax would be delayed until 2026.
Like the House bill, the Senate bill does not outright repeal the individual mandate nor does it repeal
the employer shared responsibility requirement but reduces the applicable tax penalties to zero.
One of the most significant aspects of both bills relates to the impact on individuals who do not have
access to employer-provided health coverage. As a reminder, the ACA provided for expansion of
Medicaid. Certain states did, in fact, expand Medicaid to individuals earning below 138% of poverty.
The Senate bill would allow the so-called expansion states to continue to receive federal money for
their Medicaid expansion for a few more years than the House bill, phasing it out between 2020 and
2024. In a more global way, the Senate bill would allow states to either take a block grant or per
capita allotment to provide care for the Medicaid population. There is concern that both the House
and Senate bills would significantly reduce coverage for, and funding for those below certain income
thresholds and those in poverty. While this does not directly impact employers, it arguably does
impact overall health care costs in that if fewer people are covered, there would be more cost
shifting to the paying population. This is bound to create significant discussion as efforts are made
to merge the House and Senate bills.
Another major difference between the House and Senate bills relates to the premium tax credits,
currently made available under the ACA tor individuals earning below 400% of poverty. The Senate
bill would continue these tax credits but would restrict the group eligible for them. The House bill
would provide a refundable tax credit, based on earnings, as discussed in HRB 128.
At this point, the Senate is waiting for the Congressional Budget Office to score its bill which is
expected to be released next week. The bill would then be considered on the floor of Congress.
Several Senators have already indicated uncertainty about the bill.
The process is sure to evolve and we will keep you updated as matters progress. In the interim,
remember the Affordable Care Act has not been repealed, and remains in full force and effect.
June 23, 2017 – HRB 130 Page 1

CBIZ Health Reform Bulletin
About the Author: Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits
& Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on
monitoring and interpreting state and federal employee benefits law. Ms. McLeese is based in the CBIZ Kansas
City office.
The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these
comments directed to specific situations. The information contained herein is provided as general guidance and may be
affected by changes in law or regulation. The information contained herein is not intended to replace or substitute for
accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations.
This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in
connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could
affect the information contained herein.
June 23, 2017 – HRB 130 Page 2

Health Reform Bulletin 130 | Senate Releases Health Care Reform Proposal

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Health Reform Bulletin 130 | Senate Releases Health Care Reform Proposal