Updated June, 16 2019 –
Passed by the House of Representatives, but the American Health Care Act (AHCA) did not pass the Senate thanks to the late Republican Sen. John McCain who joined Democrat Senators to defeat the bill’s passage.
Tragically, it would have benefited employers in five ways.
Employers are still the biggest sponsors of healthcare insurance in America.
Private companies paid 68 percent of their employees’ premiums while state and local governments paid 71 percent of the health-coverage costs in 2016, according to the Bureau of Labor statistics.
But there is seemingly conflicting data. On average, employers paid 83 percent of health insurance premiums for single coverage and 72 percent of family coverage in 2015, according to Zane Benefits.
However, it’s likely that both sets of data are correct.
As each year passed, ObamaCare has been increasingly devastating to the national debt, which continues to skyrocket:
It’s also devastated state government budgets, businesses, and to individual policyholders who haven’t qualified for free Medicaid. And health-insurers such as Aetna have pulled out of ObamaCare in multiple states.
Whatever the true figures regarding employers, it’s an expensive perk for each employee at a minimum annual cost of $5,000.
So what about the bill, (AHCA)? What would have happened to employers if passed by the Senate to replace ObamaCare?
If passed, it turns out AHCA will benefit employers in five ways:
1. Elimination of tax penalties
ObamaCare requires companies with 50 or more workers to pay for health insurance.
If they don’t, there are expensive tax penalties.
Worse, ObamaCare defines a full-time employee as a person who only works 30 hours per week. That mandate greatly increased the costs to employers by extending coverage to part-time workers.
It also served as a catalyst to hurt productivity because it led to a cut in employee hours. That’s why the average American workweek is only 34.4 hours.
AHCA would not have necessarily repealed the requirement to pay for health coverage, but the tax penalty would have disappeared retroactively to 2016. (Fortunately, President Trump’s tax reform eliminated the individual’s mandate to buy health insurance.)
2. Postponement of the Cadillac tax
AHCA would have delayed the Cadillac tax — a 40 percent tax on both employers and insurers on high-cost coverage – until 2025.
Unions and employers, alike, have been very critical of the ObamaCare Cadillac tax. Employers’ criticisms of ObamaCare are very well documented.
You might also recall in 2013 when the United Union of Roofers, Waterproofers and Allied Workers was the first union to demand a “repeal or complete reform” of ObamaCare.
3. Increase in tax saving tools
Starting in the tax year of 2018, AHCA would have changed the tax code. That would have meant an increase in individual savings accounts (HSAs) and health-flexible spending accounts (FSAs).
AHCA would have permitted tax-free contributions to the individual and families. HSA allowances would have doubled.
It would have also increased how HSA dollars could be spent by repealing the ban in HSAs for over-the-counter medicine.
The ObamaCare limit of $2,600 would have been eliminated on nontaxable contributions to FSAs.
Companies would have experienced a savings in the Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) contributions.
AHCA would have allowed high-deductible options that will drive savings in costs.
4. Ban taxes on medical devices and health-insurance companies
There would have been savings on employer-sponsored healthcare costs.
The law would have eliminated the ObamaCare’s 2.3 percent taxes on new medical devices and health insurance.
They were postponed for 2017 but were implemented again in 2018.
5. Simplification of reporting
It was anticipated that the complex mandates will be greatly simplified, especially in reporting paperwork – specifically Section 6055 and 6056, respectively.
Why? We got insights from President Trump’s first executive action, which was to tell agencies to alleviate the monumental paperwork requirements.
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“Government’s first duty is to protect the people, not run their lives.”