Health Care Legislation: Passage of Amended ACHA Still Uncertain

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It’s hard to keep up with all the health care legislation news lately. That’s why we’re providing regular summaries of the latest news, reflecting the current state of health care in the United States or how it may be changing in the not-too-distant future. Here’s a recap of some of the latest stories:

Freedom Caucus Leadership Reaches Deal to Support AHCA

House Freedom Caucus leader, Rep. Mark Meadows (R-NC), and Tuesday Group leader, Rep. Tom MacArthur (R-NJ), reached a deal this week to amend the American Health Care Act (AHCA) to gain broader Republican support.

The amendment would give States the option to waive out of essential health benefit requirements and community rating rules limiting increased premiums based on age or pre-existing conditions.
States would be required to show that the proposed waiver would reduce or stabilize premiums, increase participation, stabilize health insurance markets, or increase choice. Waivers to states would be presumptively granted.

A state granted a waiver from the community rating standard regarding age could allow insurers to charge premium higher than the 1:5 ratio required by the AHCA. States granted a waiver from the pre-existing conditions requirements would be free to allow insurers to charge increased premiums for those with pre-existing conditions, as long as the state establishes a high-risk pool.

These proposed changes have engendered support from Freedom Caucus members who view these waivers as an opportunity for states to bring premiums down by removing government controls on the market. Moderate republicans, on the other hand, have voiced concerns about how this amendment might increase premiums for older Americans and those with pre-existing conditions.

Passage of Amended ACHA Still Uncertain

President Trump and the White House support the amendment to the AHCA and have been putting pressure on Congress to vote on the measure before President Trumps first one hundred days in office expire on Saturday, April 29.

House Leadership, though, has said that a vote will not take place until at least next week. Speaker Paul Ryan (R-WI) says that “we’re going to go when we have the votes.”

While the changes to the bill have won the support of the Freedom Caucus, moderate Republicans, including Tuesday Group co-chair Rep. Charlie Dent (R-PA) have criticized the changes. In addition, Moderates feel that their concerns about the decline in Medicaid coverage have been brushed aside.

While the House Whips report that they are closer to the 216 votes needed to pass the Bill, they have not reached the critical number yet. House Democrats, meanwhile, have threatened to withhold their votes on a continuing resolution to avoid a government shutdown if the Republicans move forward with a vote on the amended AHCA.

Even if the AHCA were to pass the House, it is unlikely that the AHCA could win broad support of Republican senators without significant changes to the legislative language. Republican senators, as a group, are more moderate than their House counterparts.

Many Republican senators have expressed concerns like those expressed by moderate Republican members of the House.
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President Trump’s Tax Plan Includes Increase in Dependent Care Benefits

President Trump released an outline of his tax reform proposal on Wednesday, April 26. Relief for families with child and dependent care expenses is included in the Administration’s proposal.

The tax plan would create Dependent Care Savings Account (DCSA), adapt unemployment insurance to allow six weeks of paid maternity leave, and increase the amount of child and dependent care expenses that taxpayers can deduct.

The DCSA would allow individuals to open a savings account and contribute up to $2,000 per year, pre-tax or tax-deductible, to save for current and future child and dependent care expenses. DCSA could be used for traditional childcare expenses, K-12 educational expenses, and college expenses.

Additionally, DCSAs could be used to fund an elderly dependent’s adult day care and in-home or long-term care expenses. The government would also match parental contributions to DCSAs up to $1,000 per year.

The deduction of dependent and childcare costs would be increased to 100% of childcare expenses, capped at the average cost of childcare in the state for children the same age as a taxpayer’s dependent. This would be structured as an above the line deduction used to limit the taxpayer’s gross annual income.

In addition, the deduction would be allowed for private, institutional, nursery, afterschool, and enrichment programs, not just those allowing a parent to work. The benefit would be applicable to stay-at-home parents and grandparents as well.

Fiduciary Rule Delayed, But Compliance with Rule May be Necessary in June

Implementation of the Fiduciary Rule has been delayed until June 9, 2017.

The Department of Labor implemented this delay to “examine the Fiduciary Duty Rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.”

If the department finds that the Rule will have adverse effects, then the Department is instructed to “publish for notice and comment a proposed rule rescinding or revising the Rule.”

While the Department is working to evaluate the Fiduciary Rule as required by the Presidential Memorandum, it is unlikely that this work will be completed by June 9, 2017.

The DOL has not announces whether or not they will enforce the Rule following the new June 9, 2017 applicability date.

 

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Written by Brendan Fallon; published in the Legislation category

ConnectYourCare does not provide tax or legal advice. This information is not intended and should not be taken as tax or legal advice. Any tax or legal information in this notice is merely a summary of ConnectYourCare’s understanding and interpretation of some of the current tax regulations and is not exhaustive. You should consult your tax advisor or legal counsel for advice and information concerning your particular situation before making any decisions.