It’s no secret that Trump wanted the Affordable Care Act repealed as soon as he was elected into Office. With a Republican majority in both the House and Senate, the repeal is becoming more of a reality. What’s important now is to look at the new plan they are replacing the ACA with. The American Health Care Act (AHCA) was announced March 6, 2017 and has already been approved by two committees: The House Ways and Means and the Energy and Commerce. Using as little legal jargon as possible, here are the main points the new rule proposes.
As of January 1, 2016 the tax penalty for not having coverage is gone.
If you lapse your coverage for over 63 days, you will face a penalty of 30% of your premiums.
Large employers who do not offer health coverage no longer receive a tax penalty.
The 3-month retroactive coverage for Medicaid is no longer required in October 2017.
December 31, 2017 the HI payroll tax on high earners for Medicare is gone.
The younger you are the higher tax credit you will receive.
You can use your tax credit to purchase qualified health plans or catastrophic plans. You cannot use it to buy plans that cover abortion.
January 1, 2018 the amount of tax free contributions you can make to your HSA increases.
$6,550 for individuals & $13,100 for families, excess contributions (from tax credits) do not count towards this limit.
Over the age of 55 you can put in an extra $1,000 as catch up.
The tax penalty for non-qualified expenses decreases to 10%.
The following taxes are repealed: tanning, health insurers, pharmaceutical manufactures, excise tax on sale of medical devices, and the chronic care tax.
Annual limit on FSA’s appealed.
Monthly paid credits will start based on a flat rate determined by age.
Yearly totals (Per Individual) =
< 29 = $2,000
30-39 = $2,500
40-49 = $3,000
50-59 = $3,500
> 60 = $4,000
For families, you can claim up to $14,000 per year- the 5 oldest members.
Excess credits, after paying premiums on coverage, will be payable to your HSA.
Cost sharing subsidies are repealed January 1, 2020.
Tax credits for low-wage small employers are repealed.
Medicaid expansion becomes up to the states and they must match the finances needed to do so.
Federal Medicaid funding capped.
You still cannot exclude for pre-existing conditions (unless you are a short term non-renewable policy).
The “10 essential health benefits” category will still be required in coverage.
Takes away Medicaid funding for Planned Parenthood for 1 year.
High-cost employer-sponsored group health plans Cadillac tax is suspended from 2020-2024.
Keep in mind, this is just the beginning of the AHCA. Nothing has been officially passed and I am sure there will be many, many, many changes to this. Check back for updates and rulings as they are passed!
Info from: http://files.kff.org/attachment/Proposals-to-Replace-the-Affordable-Care-Act-Summary-of-the-American-Health-Care-Act
Nicolette Jordan, Client Relations Manager