House Republicans Cancel Vote on the American Health Care Act

On March 24, 2017, the U.S. House of Representatives canceled a vote on the proposed ACA replacement plan, known as the American Health Care Act (AHCA). According to House leadership, the Republicans could not garner enough support for the AHCA to pass the House. Following the cancelation, House Speaker Paul Ryan (R-WI) and Pres. Trump stated that the ACA repeal and replace efforts will be put on the backburner and that Congress would move on to other Congressional agenda items, including tax reform. However, since those announcements, there have been ongoing discussions behind the scenes regarding a revival of the ACA repeal and replace efforts. So Congress may revisit the issue in the near future.From its introduction, the AHCA faced an uphill battle in the House, as Republican factions never fully supported the bill. In particular, the House Freedom Caucus, a conservative group of about 40 Congresspersons, thought the bill should go further with regard to repealing the ACA. Specifically, the caucus wanted a full repeal of the ACA’s prohibition on lifetime and annual dollar limits and the ACA’s mandates with respect to essential health benefits, believing those play a role in rising health care insurance premium rates. In addition, the caucus is opposed to the idea of the federal government mandating which benefits should be included in health insurance plans. Instead, the caucus says, individuals should be able to choose what benefits they want. Ultimately, House leadership could not appease the caucus while also maintaining support from other, more moderate House Republicans.While reviving the ACA repeal and replace debate seems to be going on behind the scenes, the future of the ACA remains unclear. For employers, the best approach is to continue to comply with the ACA’s requirements, including offering affordable coverage to full time employees pursuant to the employer mandate and with related reporting requirements.In the meantime, there are a few different scenarios that may play out. Under the first scenario, the Republicans quickly come to agreement on a replacement for the AHCA. As discussed earlier, it appears House leadership and the White House don’t want to abandon the ACA discussion quite yet. With pressure mounting from within and from campaign promises, perhaps the Republicans can quickly unify and pass an alternative bill. This seems unlikely given the intense focus without resolution over the past few months; but it is a possibility.Under a second scenario, the ACA remains the law of the land, but the Trump administration refuses to enforce ACA’s requirements and penalties. Setting aside the limits to which agencies within the administration can ignore the law, this would leave a relaxed version of the ACA. The law would still be on the books, and so employers should comply. But perhaps there would be less pressure, since penalty exposure would be lessened and other requirements, including reporting, may be simplified. Under yet another scenario, the ACA remains the law but the Trump administration enforces it. Under this scenario, the status quo remains—employers must continue to comply with all of the ACA’s requirements or risk penalties. This is really the compliance approach all employers should assume for now.As always, we will continue to monitor developments on the continued Republican effort to repeal and replace the ACA as we move forward.