Senate Releases Draft Reform Legislation

May 30, 2017

On June 22, 2017, the Senate released draft health care reform legislation, the Better Care Reconciliation Act of 2017 (“BCRA”). It is substantially similar to the America’s Health Care Act (“AHCA”), legislation passed by the House last month.

 

The Senate bill is not without controversy, drawing criticism from Democrats, moderate and far-right Republicans. The Senate Majority Leader has indicated that the bill will be brought for a vote before the 4th of July recess. Because no Democrats will vote in favor of “repeal and replace” legislation, the Republicans will need 51 votes. This means no more than two Republican Senators can vote against the legislation. So far, at least five have announced their opposition to the bill.

 

Further, the Congressional Budget Office is expected to score the bill early this week, which may affect the vote count. There will be a significant amount of negotiation and political maneuvering to determine whether the Republicans can secure the votes to pass one of their major policy initiatives, to repeal and replace the Affordable Care Act (“ACA”).

 

The following chart highlights some of the key aspects of the ACA and how they would be changed by AHCA and BCRA. This chart is targeted at specific aspects of the law that affect employers sponsoring group health plans. Changes to Medicaid and other government programs are not addressed.

 

ACA, AHCA and BCRA Comparisons

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PCORI Fee Filing Reminder

June 7, 2017
Overview With the release of IRS Notice 2016-64, issued on Nov. 4, 2016, the IRS provided that the PCORI fee (Patient-Centered Outcomes Research Institute fee) also called the CERF fee (Comparative Effectiveness Research Fee) for plan years ending on or after Oct. 1, 2016, and before Oct. 1, 2017, including 2016 calendar year plans, is $2.26 per each person covered under the applicable health plan, up from $2.17 for the previous plan year. The fee applies on the first day of the policy/plan year beginning on or after October 2, 2011 and continues to apply through policy/plan years ending before October 1, 2019. (These dates are based upon the federal government’s fiscal year of October 1 through September 30.) The fee is classified as a tax, and it will be reported and paid to the IRS via Form 720 Quarterly Federal Excise Tax Return, which was revised to accommodate this annual tax. The fee is based on the average covered lives for the applicable 12-month policy/plan year, and is payable on July 31 of the calendar year that follows the year in which the policy/plan year ends. IRS Form Form 720 and Instructions, click HERE.