The AHCA, or American Health Care Act, recently passed the House of Representatives and is considered the replacement of Obamacare. This has left many small business owners wandering what it means for them and their employees. Below are some important things you should know.
What This New Law Changed
There are a number of Obamacare features which were removed by this new law. Some of the most important include reducing subsidies for health insurance, removing individual or employer mandates, offering funding for pools which are high risk, strengthening Health Savings Accounts, and eliminating the tax credit for small businesses. Additional changes which were made include the rollback of numerous ACA taxes, the implementation of state waivers for community rating pools and the health benefits requirement, and changing premium tax credits for the HRA for small businesses.
The removal of individual or employer mandates is of great importance to small business owners. It lowers the penalties which were enacted within the provisions starting in 2016. At the same time, the new law gives insurers the ability to place a one year, late enrollment charge of thirty percent beginning in 2019 on the premiums of those applicants who have a coverage lapse which is more than sixty three days during the previous twelve months.
The elimination of the tax credit for small businesses is also important. This credit will be repealed as of the year 2020. However, from 2018 until 2020 business owners who select policies which include elective abortions would also be ineligible for this tax credit.
The MacArthur Amendment
The MacArthur Amendment is important as it gives states the ability to apply for the waivers which are offered through the essential health benefits of the ACA. There are three waivers in total, one of which will give insurers the ability to charge higher fees dependent on health status, while the others would allow insurers to charge higher fees dependent on age and establish essential medical benefits of their own. Within the ACA insurers can charge older individuals three times more than what younger people are charged. The AHCA is expected to change this ratio from 3:1 up to 5:1. Waivers would allow the ratio to be increased higher.
What Remained The Same
There are a number of Obamacare features which remain unchanged in the new law. Some of these include coverage for young adults until the age of 26, requirements for the coverage of pre-existing conditions, and restrictions for age rating. The ban on annual or lifetime limits for health benefits is also still included, as well as the ban on underwriting for health status and restrictions regarding discrimination dependent on disability, gender, nationality or race. Limits for cost sharing also remain for plans which are nongrandfathered as well as essential health benefits.