ASSOCIATION HEALTH PLANS
However, supporters of AHPs say they
support the inclusion of minimum
funding requirements in AHP
regulations to fortify the financial
strength of AHPs. Supporters of AHPs
tend to be the small-employer groups
themselves, which are enthusiastic about
the opportunity to purchase health
insurance at a cheaper rate than small
groups typically face. Alfredo Ortiz,
president of Job Creators Network, says
the expansion to small employers and
individuals would allow AHPs to achieve
the economies of scale necessary to
bargain for lower premiums and better
plans.
As with all laws and regulations, the
devil is in the details. The success of
AHPs will depend in large part on the
strength of the financial requirements
for AHPs. If written poorly, the
regulations could result in a repeat
of mistakes made with MEWAs in
the 1980s. But if written well, the
regulations could unleash vast new
buying power for small employers and
even self-employed individuals, truly
leveling the playing field for these
entities with regard to buying health
insurance.
EMPLOYER MANDATE (PAY OR PLAY)
The employer mandate is still in
effect. This is the provision which
requires employers with fifty or more
employees to provide health coverage
at a certain quality and at a certain
price or else face a penalty tax. This
requirement has not been repealed or in
any way altered under the law. In fact,
enforcement of this provision under
the IRS is proceeding apace. Beginning
last fall, the IRS started to issue letters
to employers proposing tax penalties
regarding plan year 2015. Employers
must then respond with a payment or
a defense/explanation regarding their
plan offerings from 2015. The IRS has
indicated it is looking to speed up its
enforcement, meaning that they are
attempting to issue letters regarding
plan years 2016 and 2017 as quickly as
they can process the information filed by
employers. So, employers must continue
to comply with this provision.
But there are some who believe that
Republicans may push to repeal this
portion of the law in 2018 (effective for
future years). If so, it would be welcome
relief for employers, who generally find
the requirement expensive and the
reporting of compliance overly complex.
This attempt at repeal would certainly
be met with resistance by Democrats
and other supporters of the ACA. And
there are some who believe that even
within Republican ranks, there may
be some who would not support such
a repeal because it would mean losing
penalty/tax dollars that the IRS could
otherwise collect for the federal
government.
Is there another option? Yes—some
argue that the Executive Branch has
the authority to direct the IRS not to
enforce the law. In other words, without
actually repealing the law, the IRS would
simply declare an internal policy of not
collecting that penalty tax. Employers
would then technically be in violation
of the ACA if they did not comply, but
they could rely on the IRS policy of not
enforcing that provision.
This would be a surprising turn of
events from the IRS, whose mission
is to collect all taxes/penalties due
under the law. But there is precedent
for a president announcing a policy
of nonenforcement with laws that
the president does not approve of. For
instance, President Obama announced
a nonenforcement of the Defense of
Marriage Act (DOMA) due to its barring
of marriage between homosexuals.
No one can predict whether President
Trump would follow that path of
directing an agency not to enforce a law.
It was a highly controversial maneuver
by the Obama Administration, given
that the Executive Branch is generally
charged with “executing” the law. But
with this precedent from the last
administration, it is not impossible. +
SUMMARY
Although the
Affordable Care Act
is no longer in the
headlines, it is not
gone. The new use of
Association Health
Plans has the potential
to make good policies
much cheaper for
small employers, if
regulations are well
written. The employer
mandate continues
to challenge large
employers, but there
are at least two
possible ways this
provision could be
removed or changed,
even with resistance
from the many ACA
supporters. Employers
should continue to
comply with all of
the ACA’s provisions,
particularly because
the IRS is actively
pursuing penalty
dollars from the
past. But stay aware
for possible new
strategies to remove
the employer mandate.
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