The Obamacare Repeal and Replace Plan Reviewed and Explained

A Review and Explanation of “the American Health Care Act” (The New ObamaCare Repeal and Replace Plan)

We review “the American Health Care Act” (The New ObamaCare Replacement Plan) to help everyone understand the proposed changes.

TIP: Don’t feel like reading? See our simplified version of “the American Health Care Act” explained here.

RESOURCES AND BACKGROUND: We originally reviewed and explained a leaked draft version of the House Repeal and Replace plan for ObamaCare, providing a synopsis of each provision with resources. Since we did the review, an official version has come out. Here is the non-leaked version of the bill. There are a few differences between the two bills which we will explain shortly. For now, you should note the new bill is the same as past House GOP plans and the leaked draft, and thus the review below should be correct minus a few details.

Note on facts vs. opinions: All sections are fact-based, however, the first section of this page includes opinions on those facts (as the first part is the part that helps frame everything). The review of the leaked plan attempts to take no sides although a few clearly market “tips” may contain opinions like “no defunding Planned Parenthood and the 21st Century Cures Act is not ideal in an ObamaCare repair plan.” General opinions and insight can be attributed to Tom and the fact-based review to Erin.

The Background on the Leaked Plan, “the American Health Care Act,” and Our Review

This is a review of a leaked draft version of the House Repeal and Replace plan. It is essentially the “Better Way” or Ryancare plan with a few tweaks. Keeping in mind the same bill has been circulating for the past 25 years; one might not be surprised to learn that the final, official House bill, “the American Health Care Act,” has nearly identical provisions to the leaked version and similar provisions to past bills. There are minor tweaks, but there is no hidden public option or curve ball as far as I can tell.

As we speculated correctly upon reviewing the leak, “this leaked plan is almost certainly close to identical to the plan locked away in a safe room (the one Rand Paul tried to access) due to the safe room incident coming less than a week after the leak.”

With that in mind, one should note that not all Republicans agree on this plan. Rand and the Freedom Caucus specifically disagree as does HHS Secretary Tom Price. They all want less.

Furthermore, Democrats haven’t embraced the leaked plan’s provisions.

This means you the people and reporters will have to identify what is good enough to support and what needs to be changed.

This is a “very centered, all things considered,” GOP plan. True, it strips funding from states, punishes the have-nots, takes away cost assistance, defunds Planned Parenthood, and hurts women, but, have you seen the Freedom Caucus? For an ACA supporter, there are worse things than Trump backing Ryan and the more established Tea Party forces.

Anyone wanting to know what Trump and Ryan are thinking will do well to read this review. We are the first ones to review it. Given what we know about healthcare reform, we believe that a version of this will end up on the table.

Tip: You can read the leaked .pdf here. The laws that are affected are the Patient Protection and Affordable Care Act (ACA) as amended by the 21st Century Cures Act, The IRS Code of 1986, and the Social Security Act (SSA).

Note: The SSA was also amended by the ACA because it is a legacy social safety net law which has been amended by almost every legislation related to public safety net programs.

Summary of the Leaked House ObamaCare Repeal and Replace Plan

First, if you haven’t read a basic review of the Better Way (Ryancare) plan and if you haven’t seen say “the Last Week Tonight with John Oliver (HBO) where he discusses the Repeal and Replace plan” you should. The basics are easy to understand, the details are complicated.

Here are the basics:

• Most of this starts in 2018 and 2020 (after Congress is elected 1 to 2 times and Trump gets another shot). I.e. they do a “slow rug pull.” The trick is similar to the one in which a magician pulls the tablecloth off so fast that things don’t fall off the table. A slow pull will fling things everywhere. They aren’t “pulling the rug out quickly.” They are doing a “slow rug pull.” For example, Medicaid will be defunded in 2020 so people don’t lose coverage until after the GOP is reelected. Shady!
• The plan takes away the fees for the mandates, but not the mandates themselves. It also takes away most taxes on industry. You can imagine what happens when the federal government is starved of revenue. The deficit isn’t going down without other serious, cuts to say the least.
• The plan includes a continuous coverage exclusion which allows insurers to charge you 30% more if you have a gap in coverage of more than 63 days. After you pay in for 12 months, it goes back to normal. This is intended to be a fair trade for the mandate, but it will prevent low-income Americans from accessing coverage in many cases. This provision is unlikely to fill the market with young people, but there are many worse ideas out there.
• The plan replaces income-based tax credits and out-of-pocket cost assistance with age-based cost assistance. This works well for some groups and fixes some sticking points. However, older people (under 65) with lower incomes and low-income young people with higher medical costs are going to lose a significant amount of assistance. Those with chronic conditions who depend on out-of-pocket cost sharing would be in trouble.
• The plan repeals Medicaid expansion by pulling the rug out slowly and block-grants traditional Medicaid. This will probably result in less funding for states. What ever happened to States’ Rights Federalism?
• The plan expands HSAs. HSAs are good for the wealthy, but people really hate them. The idea is to encourage you to put money into a savings account with tax advantages, then you can use the funds for a broad range of healthcare costs. This is really smart. We already have them, but people from all walks of life tend to yell at me a lot when I suggest using them. The new limits replace cost sharing subsidies, but people with no extra cash are going to be furious. If you have trouble paying your bills, you certainly aren’t going to be putting money into an HSA or any other savings account. That being said, HSA changes suggested by this draft will help a lot of people without significant tax revenue loss. Those changes include: making the HSA contribution limit equal to the HDHPs maximum out-of-pocket limit, allowing people to purchase OTCs, reducing the tax penalty for use the funds for non approved medical spending, allowing older couples to make catch-up contributions together, and allowing a 60-day window after purchasing a HDHP for an HSA to be establish with tax benefits backdated from the start of coverage. It’s a bit surprising that GOP plan doesn’t drop the requirement to have a HDHP altogether and allow everyone an opportunity to get the tax benefits of these savings accounts.
• It would increase the taxes paid by middle-class workers on their wages by making the value of employer insurance taxable income. At the same time, it would cut taxes on employer benefit packages valued over $500,000, cut the tax on incomes over $200,000-$250,000, cut the tax on insurers’ profits, and cut the tax on brand-named pharmaceutical companies.
• It will do more, including strange things like defunding parts of the brand new 21st Century Cures Act that the GOP just passed. They defund sections of a highly touted ‘bipartisan’ Act that just passed. There are other things like that. In addition, abortion coverage is stripped away in very specific ways. That is, of course, a tricky subject that could have a dramatic effect the way insurers in every sector offer this coverage (or not). Lots of little questionable things that we need very smart policy minded-people to discuss. They try to defund Planned Parenthood altogether.

Thus, the plan helps high earners and businesses the most. It is a wash for the middle class depending on individual out-of-pocket medical costs. It stands to leave tens of millions of uninsured and under-insured individuals with access to an underfunded sick pool of potentially expensive coverage or nothing at all.

That is the gist of it. Some of the far-right and Libertarians want a lot less, Democrats and progressives will want more. That means people will have to fight to even get this much passed. Things are very much up in the air.

Here is an example of how tax credits change. You’ll need to see the full review below for the details. We will be creating another, simpler summary soon. For now, we hope this helps.

The tax credit would be paid for each month a person had coverage from the first day. A taxpayer is eligible for is 1/12 of these annual amounts for each covered individual based on their age:

• Under 30: $2,000 ($166.67/month)
• 30-39 years old: $2,500 ($208.33/month)
• 40-49 years old: $3,000 ($250/month)
• 50-59 years old: $3,500 ($291.67/month)
• 60 and up: $4,000 ($333.33/month)

Limitations to the tax credit:

• $14,000 ($1,166.67) Maximum tax credit for a single tax return (dependents included)
• For large families it is based on the 5 oldest members of the tax family

3/4/2017 UPDATE: A newer draft of the House bill to repeal and replace the ACA was reportedly leaked yesterday. While this new leaked draft has not yet been made public, it is being reported that it is essentially the same, but will now exclude high income earners from being eligible for the refundable tax credit which replaces the Premium Tax Credit.

NOTE: Those assistance amounts are generous when you consider that the GOP ran on repeal. It is tempting to be upset, but the reality is Ryan and his team have become (compared to the more extreme right) an odd ally of ACA supporters. They appear to be making some small steps in the right direction. There are big, big scary problems and attacks on poor people and women in here. Perhaps these inequalities can be addressed given continued pressure from informed constituents. This is, in many cases, more than our team was expecting. So try to keep that in mind.

A Full Review of the Leaked House Republican ObamaCare Plan

Below is a detailed review of each provision in the leaked plan and what it means for healthcare.

Title I- ENERGY AND COMMERCE

SEC. 101. THE PREVENTION AND PUBLIC HEALTH FUND

Legislation is always a bit difficult to understand, especially when it amends numerous sections of laws by striking a few words here and inserting a few words there.

The provision of the ACA affected is the funding provision 4002, and it would reduce federal funding for The Prevention and Public Health Fund. An interesting note is that the bill specifically states that it affects the ACA as amended by the 21st Century Cures Act. It is specific because it eliminates a significant amount of funding that was only recently added to this program with passage of the 21st Century Act.

SEC. 102. COMMUNITY HEALTH CENTER PROGRAM

This section would reduce funding for the Community Health Center Program significantly. This ACA program provides grants to private, non-profit community-based health care providers opportunities to expand the range of services and access to low-cost quality healthcare.

SEC. 103. REPEAL OF MEDICAID PROVISIONS

This section amends the SSA in a couple of different ways.

First, it would prevent states from being able to use “presumptive eligibility periods” in which providers (hospitals) can determine Medicaid eligibility. It wouldn’t take effect until after January 1st, 2020. Some states allow providers, primarily hospitals, to determine Medicaid eligibility for CHIP or Medicaid during a short window when a patient first seeks treatment. The ACA gave the states this option. If the patient’s application for Medicaid/CHIP is eventually denied, then the patient is typically still responsible for medical costs incurred; if their application is approved after review, then the medical care they received is covered. Not all states participate, and only certain types of providers are given this ability in the states that choose to. This section of the Republican plan would revoke the State’s ability to manage Medicaid eligibility in this unique way, but not until after another Presidential election has passed. It is unclear why this approach was taken.

Next, it would change the income eligibility for 6-19-year-old children back to 100% of the Federal Poverty Level (FPL) again. In 2014, the federal threshold was increased to 133% of (FPL) which affected all states. Not every state would change it’s eligibility threshold for CHIP. Many states currently have CHIP eligibility thresholds well above the minimum (200% FPL and up). However, the states that did reduce the eligibility thresholds could leave a significant number of low-income families stranded.

This section would also end a federal match funding program that helps States provide medical assistance for in-home and community-based attendant services and supports for individuals who are eligible for medical assistance under a state’s plan (like Medicaid, CHIP, or other state-run program) and whose incomes are below 150% FPL.

SEC. 104. REPEAL OF MEDICAID EXPANSION

This section would start by making Medicaid expansion an option for the States and then makes the necessary changes to end federal funding for these programs by January 1, 2020. Medicaid expansion covers millions of low-income adults who are not disabled or pregnant. This leaked version of the GOP bill would reduce funding for this program over two years and would not allow new people to enroll after December 31st, 2019 or those who have a break in eligibility before then to be considered for a State’s federal funding appropriation for Medicaid.

It would also eliminate something known as “benchmark benefit package” and its equivalents from the requirement to include minimal essential coverage after December 31st, 2019. This guideline is for most health plans, including insurances for state employees and plans simply “approved” the Secretary of HHS.

TIP: Slow pull, pull it easy, slow pull, after re-election.

SEC. 105. REPEAL OF DHS ALLOTMENT REDUCTIONS

This section would amend the SSA, repealing two paragraphs which outline reduced federal funding to State DSH programs for hospitals and facilities that provide for uninsured patients and charity care. The reasoning behind the DHS allotments reducing over time under the ACA was the expectation that fewer patients who are uninsured would be seeking or require charity care.

SEC. 106. REPEAL OF COST-SHARING REDUCTION SUBSIDY

This section would repeal the entire ACA provision for Cost-sharing Reduction subsidies (CSR). These subsidies lower the out-of-pocket costs (copays, deductibles, and coinsurance) for those with incomes between 100% and 250% of the FPL. It is paid directly to the marketplace insurer (Silver plans only) and covers progressively more as income drops with thresholds at 200% FPL and 150% FPL. These subsidies significantly reduce the out-of-pocket expenses for millions. Unfortunately, many of the people who are benefiting fromCSR aren’t aware they are getting this help and they have no idea how much money they are currently saving from their out-of-pocket costs each year by it. In 2015, 57.3% of those enrolled in Marketplace plans had reduced out-of-pocket costs because of CSR.

TIP: Everyone knows about the “ObamaCare tax credits”, few realize their out-of-pocket costs are subsidized as well… just wait until those making under 250% realize their CSR subsidies were taken away. I can’t imagine people will like that.

SEC. 107. PER CAPITA-BASED CAP ON MEDICAID PAYMENTS FOR MEDICAL ASSISTANCE

This section would change the way that Federal funding for state-run medical assistance programs works and adds an entirely new section to the SSA, 1903A (page 7). This would provide for per-capita based payments for medical assistance based on demographic categories enrolled in a State plan. It’s a very long and complicated algorithm that depends a lot on the HHS and a quarterly CMS-64 report.

Basically, it rethinks federal funding allotments to States for residents who are eligible for a variety of State administrated health related safety-net programs: CHIP (remember that they moved the federal threshold down for CHIP for 6-19 to 100% FPL from 133% FPL), Indian Health Services, Breast and Cervical Cancer Services, Partial-Benefit Enrollees (includes emergency care for and unlawful aliens, low-income, dual eligible Medicaid/Medicare, cost assistance for employer coverage for low–income workers). The residents would be broken into categories: Elderly, Blind and Disabled, Children, Expansion Enrollees (this is only a transitional group), and lastly, Other Non-elderly, Non-disabled, Expansion Adults. States would be funded per Capita amounts that vary based on the categories.

States with waivers to a State plan using ACA waiver 1115 would be affected by this section. It would apply to medical assistance expenditures and medical assistance payments under the waiver in the same way as if they were made under a State plan. The limitations on expenditures supersede other payment limitations (including per capita limitations) otherwise provided by the waiver. This makes it easier to use the funds to cover even more people or to provide more assistance, but doing so won’t mean more federal funding.

This section also would increase federal matching for improving data processing and meeting reporting requirements for a few years.

TIP: AKA why block-granting medicaid is a potential attack on low-income people and states. We want the freedom to make better state-based programs (actual federalism). Actually allowing progressive states liberty AND funding without a “slow rug pull” would be swell.

SEC. 108. FEDERAL PAYMENTS TO STATES.

This section would add a catch to Medicaid funding. For a state to receive funding for Medicaid (or a waiver) for payments to any non-profits (or anyone associated with them) who provide abortions (except under the Hyde Amendment) whose funding from Medicaid as a nationwide health care network exceeded $350,000,000 in the fiscal year 2014. This very long section would effect only one organization in the US (and potentially any affiliated organization) and you’ll only need one guess. States would be required to stop reimbursing Planned Parenthood to receive federal Medicaid funding for which they are eligible.

TIP: Attention progressives, here is where they try to defund Planned Parenthood. They need to include this in a separate bill. The whole country has rights that need to be respected, not just the far-right.

SEC. 109. FINANCIAL ASSISTANCE FOR STATES FOR FUNDING THE NEEDS OF CERTAIN INDIVIDUALS

This section would create and entirely new title in the SSA, or to say it another way, a new group of individuals who are entitled to assistance administrated by the State. The new Title XXII would establish new state innovation grants for establishing stability in their health insurance and healthcare markets.

States may use the proposed grants provided by the HHS for several purposes. Grants may be used for helping high-risk individuals; making arrangement with “appropriate entities” to help stabilize premiums; reducing the cost of providing coverage for those who require a lot of care; promoting participation in the marketplace; promoting access to primary care (including preventative, dental, and vision), and for providing assistance to reduce out-of-pocket costs. These grants would be available beginning January 1, 2020, and require a certain amount of matched funding.

TIP: Why is the high risk pool slated to start in 2020? Here are some keywords for you “wall” and “4 more years.” I will be shocked if they properly fund these pools and even if they do, I almost side with the Freedom Caucus on this one. I don’t want pools of sick and poor people that struggle with funding. I am a progressive so I want better than a state sick pool, not worse. I understand the logic, but it does not seem like the right solution.

SEC. 110. CONTINUOUS HEALTH INSURANCE COVERAGE INCENTIVE.

This section would amend the Public Health Service Act to allow insurers to charge 30% for premiums for an entire year when a person has a lapse in coverage for more than 63 continuous days in the last year.

TIP: This is the fabled “continuous coverage exclusion.” We were expecting this to allow exclusions of chronic illness or to have a higher rate than 30%. This version is a “good news” version. Here is the thing, a 30% increase will bar some low-income Americans from the market. This isn’t great, but this is way better than expected. This is the sort of balancing act we are up against here, this is “not as bad,” but “not good.” This replaces aspects of the mandate indirectly.

SEC. 111. PERMITTING STATES TO DETERMINE ESSENTIAL HEALTH BENEFITS.

This section would repeal the definition of Essential Health Benefits as laid out by the Affordable Care Act after December 31, 2019, and places the responsibility for defining ‘minimal essential benefits’ completely to States.

TIP: ObamaCare’s essential health benefits are essential. However, they also increase the cost of plans. This will allow for junk plans and exclusions for women’s health services, but will create some cheap plans that will make some happy until they are sick.

SEC. 112. OTHER MARKET REFORMS

As the section title alludes, this section would effect the ACA in a several different ways.

It would start by increasing the amount insurers can provide older adults (under 65) can charge in premiums. Under the ACA the insurers are allowed to charge more based on age, but they were restricted to charging their older enrollees no more than 3x their youngest enrollees. This section increases that to 5x which could mean middle-aged adults could see their premiums rise significantly, especially since the elimination of income-based cost assistance and cost-sharing reduction subsidies altogether.

This section would also require all marketplaces to provide proof to HHS of an individual’s eligibility for a Special Enrollment Period through the Marketplaces.

It also goes into specific detail allowing insurers to continue to offer their pre-ACA coverage on or off the marketplaces.

Title II-WAYS AND MEANS

SEC. 201. RECAPTURE OF EXCESS ADVANCED PAYMENTS OF PREMIUM TAX CREDITS.

This section would affect the IRS code for Premium Tax Credits (PTC) so that it doesn’t recapture excess Premium Tax Credits for the tax years 2018 and 2019.

SEC. 202. ADDITIONAL MODIFICATIONS TO PREMIUM TAX CREDIT.

This section would make eligibility for the PTC regardless of whether the insurance was purchased on or off the Exchanges, but will no longer be provided to grandfathered health plans or any insurer which provides for abortions except under the Hyde Amendment. It does specifically state that individuals can still purchase separate abortion coverage without tax credits applied. This section also prohibits non-resident aliens from being eligible for PTC.

Advanced Premium Tax Credits would only be available through the Marketplace Exchanges, but everyone who is in the US legally would be eligible for this tax credit for purchasing any kind of qualified health plan (as defined by the IRS).

This section also would adjust the tax credits so that it scales them over time to also reflect age groups and the entire section only applies to the tax years 2018 and 2019.

SEC. 203. PREMIUM TAX CREDIT.

The IRS Code would be amended to repeal the PTC and amend the ACA in kind. The PTC would end on December 31st, 2019.

SEC. 204. SMALL BUSINESS TAX CREDIT.

The small business tax credit would end with the 2019 tax year.

SEC. 205. INDIVIDUAL MANDATE.

This section wouldn’t repeal the Individual Mandate, but it would amend the IRS Code and the provisions of the ACA provisions responsible so that there would be no fee for being uninsured. This section would apply to months beginning December 31, 2015.

TIP: The way they handle the mandates seems logical. It is better to pull out their teeth than to undo them. That way, if for some reason this plan doesn’t work, we can revisit the idea of mandates with teeth. If we had a public option, then mandates could make more sense for those who opt-out. It could act like an opt out fee. The ONLY thing that happens in retrospect is the mandate. Gruber is being blamed for being political; this is political in the same sort of PR-centered way. That said, dear author of the plan, it is impressive work.

SEC. 205. EMPLOYER MANDATE.

Again, this section wouldn’t repeal the Employer Mandate to offer insurance, but it would amend the IRS Code so that the there would be no financial penalty for not complying with the mandate.

SEC. 207. REPEAL OF THE TAX ON EMPLOYEE HEALTH INSURANCE PREMIUMS AND HEALTH PLAN BENEFITS

This would repeal is an ACA tax that taxed excess employee health benefits. This amount adjusted, but for example in 2018, the current law would tax the benefits over $10,200 for an individual and $27,500 for a family (except it adjusts for retirees).

SEC. 208. REPEAL OF TAX ON OVER-THE-COUNTER MEDICATIONS

This section wouldn’t repeal a tax on OCT medications because there isn’t a tax on OCT medications (at least not federally), but it does make OTC’s an eligible expense for tax-deductible savings accounts (HSA, FSA, HRA, and Archer MSA) effective 2017. An ACA provision currently disqualifies over-the-counter medications.

SEC. 209. REPEAL OF INCREASE OF TAX ON HEALTH SAVINGS ACCOUNTS.

This section would decrease the tax penalty of spending from HSA’s and Archer MSA’s on non-qualified medical expenses back to the pre-ACA levels.

SEC. 210. REPEAL OF LIMITATIONS ON CONTRIBUTIONS TO FLEXIBLE SPENDING ACCOUNTS.

Contributions to FSA’s would return to the pre-ACA level of $5,000.

SEC. 211. REPEAL OF TAX ON PRESCRIPTION MEDICATIONS.

This section would repeal a tax paid by companies for selling brand name pharmaceuticals if they want to be able to sell prescriptions to Medicare, Medicaid, or TRICARE. The fees collected are placed in the Medicare Part B trust fund.

SEC. 212. REPEAL OF MEDICAL DEVICE EXCISE TAX.

This section would repeal an ACA provision that created a 2.3% sales tax on medical devices.

SEC. 213. REPEAL OF HEALTH INSURANCE TAX.

This section would repeal an ACA tax on health insurers profits.

SEC. 214. REPEAL OF ELIMINATION OF DEDUCTION FOR EXPENSES ALLOCABLE TO MEDICARE PART D SUBSIDY.

This section would restore the tax deductions for employer-provided retirement Rx drug coverage by including the stating that Section 139A of the IRS Code doesn’t apply to whether a tax deduction can be taken.

SEC. 215. REPEAL OF CHRONIC CARE TAX.

This section would lower the threshold for tax deducting medical expenses. Currently, the medical deduction threshold is 10% of Adjusted Gross Income (AGI) and would reduce it to the pre-ACA level of 7.5% of AGI.

SEC. 216. REPEAL OF MEDICARE TAX INCREASE.

This section would repeal the ACA provision affecting IRS Code adding a Medicare Tax on incomes over $200,000 for single filers and over $250,000 for people who file either the .9% on employee wages or the 2.9% on self-employed wages.

SEC. 217. REPEAL OF TANNING TAX.

This section would repeal the ACA’s 10% sales tax on tanning beds customers.

SEC. 218. REPEAL OF NET INVESTMENT TAX.

This section would repeal the 3.8% tax on capital gains income over $200,000 for individuals and $250,000 for families.

SEC. 219. RENUMERATION.

This section would eliminate a provision that prevents health insurers from deducting the total compensation packages for employees when they exceed $500,000 annually.

SEC. 220. ECONOMIC SUBSTANCE DOCTRINE.

This section would repeal subsection (o) of section 7701 of the IRS Code which created clear definitions of certain types of employee benefits as well as many other types of business expenses and clarified whether or not they were tax deductible for companies. It also makes appropriate changes to other related tax codes.

SEC. 221. REFUNDABLE TAX CREDIT FOR HEALTH INSURANCE COVERAGE.

This is the section that would implement a new refundable tax credit for those who purchase health insurance during the year. This tax credit would be based on age, it would not exceed the actual expenses a person paid for insurance, and it is limited to $14,000 per taxpayer with regards to dependent premiums.

The tax credit would be paid for each month a person had coverage from the first day. A taxpayer is eligible for is 1/12 of these annual amounts for each covered individual based on their age:

• Under 30: $2,000 ($166.67/month)
• 30-39 years old: $2,500 ($208.33/month)
• 40-49 years old: $3,000 ($250/month)
• 50-59 years old: $3,500 ($291.67/month)
• 60 and up: $4,000 ($333.33/month)

For tax families filing together the tax credit is capped at $14,000 annually and based on the five oldest individuals in the tax family.

It also defined ‘qualifying family member’ to include any tax-dependent and child of the taxpayer who is under 27. It doesn’t cover abortions except under the Hyde Amendment; this is a general theme throughout the bill.

It doesn’t apply to those who have ‘other specified coverage.’ The term includes anyone on a federally funded health insurance program (CHIP, Medicaid, Medicare, TRICARE, VA); group health plans (employer coverage) that fail to include substantially all of the coverage which is described in section 9832(c) of the IRS Code; members of a Health Care Sharing Ministry; and a few others.

Married couples would be required to file together.

It creates special rules for qualified small business employer health reimbursement arrangements (HRA) that reduce the tax credit an individual can be eligible for if their employer contributes to an HRA.

This plan also makes adjustments based on cost of living increases after 2020.

It adds new sections to the tax code to the provide for advanced tax credits through the Exchanges and to make excess Health Insurance Coverage Credits payable to an HSA.

SEC. 222. INCLUSION OF EXCESS COVERAGE UNDER EMPLOYER-PROVIDED HEALTH COVERAGE.

This section would make the benefits employers pay for health insurance taxable from the employee’s gross income. It also makes a few exceptions, but it essentially taxes employer-sponsored health insurance from the employee’s gross income regardless of whether it is the employer or the employee who pays for the coverage.

SEC. 223. MAXIMUM CONTRIBUTION LIMIT TO HEALTH SAVINGS ACCOUNT INCREASED TO AMOUNT OF DEDUCTIBLE AND OUT-OF-POCKET LIMITATIONS.

This section would increase the maximum contribution for to an HSAs that are tax deductible to be equal to the maximum out-of-pocket for High Deductible Health Plans (HDHP). This would change the maximum taxable HSA contribution $5,000 for individuals and $10,000 for families.

SEC. 224. CLARIFYING APPLICATIONS OF PROHIBITION ON FEDERAL FUNDING OF ABORTIONS WITH RESPECT TO CERTAIN BENEFITS AND PROGRAMS.

Amends several parts of the tax code to disallow Small Employer Health Insurance Expense Credits for any health insurance that covers abortions except those covered under the Hyde amendment.

TIP: Employers’ rights, as long as those rights are approved by social conservatives. I think that is what I’m hearing here. I get it though, abortion is a prickly issue. As long as the customer isn’t barred from paying out of pocket for the additional coverage this is OK.

SEC. 225. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CONTRIBUTIONS TO THE SAME HEALTH SAVINGS ACCOUNT.

Allows eligible spouses to contribute catch-up contributions to the same HSA account without dividing it between the spouses.

SEC. 226. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES INCURRED BEFORE ESTABLISHMENT OF HEALTH SAVINGS ACCOUNT.

This section would allow individuals who start an HSA within 60 days of beginning coverage with a qualified HDHP to treat be treated as having an HSA from the beginning of that coverage for tax purposes.