With all Eyes on AHCA, House Advances 3 Bills that Could Reduce Benefits, Raise Costs for People in Employer-Based Coverage
The week of March 6 was a busy one in the world of health care policy. On the Hill, legislation partially repealing the Affordable Care Act (ACA) and restructuring Medicaid was passed by two key House committees (H.R. the “American Health Care Act” or AHCA). At the Department of Health & Human Services, officials began reviewing almost 4,000 comments on the proposed ACA market stabilization rule that were received by the March 7th deadline.
Receiving far less attention was action in the House Education & Workforce Committee to advance three bills that could, if enacted, have far-reaching repercussions for people with employer-based health insurance.
Three bills that could undermine the security of employer-based coverage
H.R. 1101, the Small Business Health Fairness Act exempts association health plans (AHPs) sold to small businesses from complying with state and federal consumer protections. Supporters argue that doing so could lower premiums for small business owners, particularly those with younger and healthier workers. However, this would be achieved by allowing AHPs to charge employers with older, sicker and predominantly female employees more and by reducing the comprehensiveness of the benefits covered. The bill would create an uneven playing field between insurers that sell AHPs and those that sell traditional small-group insurance. It would further preempt a state’s ability to level that playing field or to ensure that all small businesses can access the same protections. The end result? A race to the regulatory bottom and higher premiums for employers with an older, sicker, or majority female workforce.
H.R. 1313, the Preserving Employee Wellness Programs Act clarifies that incentive-based workplace wellness programs do not violate non-discrimination clauses of the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act. In so doing, it would give employers greater leeway to use financial penalties to require employees to disclose personal health information, as well as family members’ health information. The bill would also make it more challenging for workers to request a “reasonable alternative standard” when they have a health condition that would make it difficult for them to meet a wellness standard.
H.R. 1304, the Self-Insurance Protection Act amends the federal definition of “health insurance” to exclude stop-loss insurance, which many employers that self-fund their health plans purchase to protect themselves against claims above a specified threshold (called an “attachment point”). The goal here is to make it easier for employers to self-fund their plans and limit the ability of federal regulators to claim that stop-loss insurance with a low attachment point is de facto health insurance (and thereby subject to relevant consumer protections). It is not clear if this change would cause courts to look less favorably on states’ efforts to regulate stop-loss, which some do in order to guard against adverse selection in their small-group insurance markets, maintain a level playing field, and protect small employers and employees.
Although these bills could ultimately result in higher costs for employees and fewer consumer protections, they advanced out of committee on March 7. The next day, Speaker Paul Ryan indicated that at least one of them, the Small Business Health Fairness Act, would be taken up on the House floor the same week they consider AHCA (potentially the week of March 20). If they clear the House, all three bills would likely need to meet a 60-vote majority in the Senate in order to be enacted. We at CHIRblog will continue to keep an eye on this legislation as it advances.