How the New Health Care Bill (AHCA) Will Affect Employee Benefits

The House of Representatives passed the American Health Care Act (AHCA) last week, a bill that would essentially repeal and replace the Affordable Care Act, also known as Obamacare. While the bill, in its current form, is unlikely to become law without significant revision, it does have a major impact on HR and employee benefits as a whole.

The AHCA bill affects people who buy private insurance through the government health care exchange. But, it also has the potential to affect employees who receive insurance coverage through their company.

What does this mean for employers and HR managers? It’s a complex situation, but here are the basics you need to know.

State Waivers Reduce Required Care

The bill includes a provision that allows states to apply for waivers that would excuse them from meeting certain Obamacare standards of care. For example, states can get waivers so that they no longer have to cover:

• Pre-existing conditions like diabetes, eating disorders, mental health disorders, pregnancy and chronic diseases (just to name a few).
• “Essential health benefits,” the basic requirements that Obamacare mandated in all health plans across the country. Things like preventative screenings, emergency services, pediatric care, prescription drugs, mental health services and maternity care.

Once states receive waivers, health plans in their state no longer have to cover the above items. This will directly affect the care available for individuals and small businesses buying insurance in that state.

Large employers, on the other hand, are allowed to meet the health care standards of ANY state they choose.

So, let’s say Texas gets a waiver to stop covering annual OB/GYN visits and contraceptive prescriptions. Essentially, employers in ANY state can opt to buy “Texas” healthcare plans for their employees.

This is a major change from the federally-mandated standards of care required across all 50 states under Obamacare.

Say Goodbye to Your Employer Mandate

The AHCA bill also eliminates the employer mandate, which requires employers with 50 or more full-time workers to offer minimum essential coverage.

That means certain companies can eliminate health plans without incurring the tax penalty that Obamacare put into place.

Smart employers know that health coverage is employee’s #1 most important benefit. If you want to keep your employees happy and attract top talent, you’ll continue to provide your employees with health care, even if the mandate goes away.

What HR Can Do

Even though the bill isn’t yet law, start making plans now.

Meet with upper management and talk about the situation. Especially if your company is looking to cut costs or reduce coverage, it’s important that you have a strong opinion on the value of health care costs.

Make it clear that high-quality health care coverage benefits your business in the long run. It’s valuable for keeping your current employees happy and healthy, and it helps you attract and hire high-quality new employees.

Talk to your team. Keep them informed about what’s happening in the news and how it affects them.

Let them know that you’re committed to maintaining their current level of health care, regardless of the status of the AHCA bill. Do what you can to prevent unnecessary panic or distrust by being open and transparent with your staff.

What to Watch For

The AHCA bill has passed the House, but it still needs to pass the Senate in order to be signed into law. As the bill moves to the Senate, it’s expected to go through a major overhaul.

House Republicans represent heavily right-leaning districts, but their Senate counterparts need to accommodate the needs of their entire state. Expect the Senate’s bill to find more middle ground between Obamacare and AHCA as outlined in the House’s bill.

What do you think about the AHCA? What steps are you taking to protect your employee’s health care coverage?