The Latest Congressional Healthcare Proposal: Bicameral ACA “Fix” with HSA Expansion

In October, following a less than enthusiastic reception among many Republicans to the bipartisan HELP Committee proposal, the House Ways and Means Committee Chairman Kevin Brady (R-TX) and Senate Finance Committee Chairman Orrin Hatch (R-UT) announced their proposal to extend cost-sharing reduction (CSR) payments, while providing significant Affordable Care Act (ACA) reforms. Importantly, their proposal also includes HSA expansion, which had not been in the recent bipartisan proposal from the HELP Committee. However, that expansion to the HSA contribution limit is only through 2022, due to constraints that limit the budgetary impact this bill can produce. Details on this provided below.

Read more about the HELP Committee proposal: Senators Strike Bipartisan Deal on Short-Term ACA Fix

According to the press release from both Committees, the agreement would fund Democratic-supported CSRs and include Republican-supported “structural reforms to the ACA.” The proposal includes:

  • Funding for CSRs through 2019, with pro-life protections For 2018, carriers must meet certain conditions to receive CSRs. These conditions would be determined in consultation with the Secretaries of Treasury and Health and Human Services to prevent “double dipping.”
  • Relief from the individual mandate from 2017-2021 This timeframe should produce enough savings to cover the cost of providing relief from the employer mandate and the HSA expansion policy.
  • Relief from the employer mandate from 2015-2017 Employers would be exempt from penalties if they did not provide coverage based on requirements of the mandate.
  • Expansion of HSAs to increase the maximum contribution limit.

UPDATE

The legislative language was released on November 1st: House Ways and Means Committee H.R. 4200 and Senate Finance Committee S. 2052.

The short-term HSA expansion is included on the final page of the bill, Section 5: The maximum contribution limit will be increased to the out-of-pocket maximum, a provision included in all of the GOP healthcare reform proposals. However, the expansion will only be in effect between December 31, 2017 and January 1, 2023.

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