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ACA overhaul legislation may face battle passing, but employer mandate could benefit staffing

June 23, 2017

Proposed legislation to overhaul the Affordable Care Act was released by Senate Republicans on Thursday. One of the major impacts on staffing firms, if it becomes law, would be the elimination of the employer mandate. However, the legislation, known as the “Better Care Reconciliation Act of 2017,” must first get approved by the Senate, which could be difficult.

“The good news for staffing in the House and Senate versions of the latest ACA ‘repeal and replace’ bill is the proposed effective repeal of the so-called ‘employer mandate,” said George Reardon, an attorney specializing in the staffing industry.

“The ACA did not actually compel employers to offer health insurance,” Reardon said. “It gave large employers the choice of offering government-approved health insurance or paying heavy penalty taxes. For technical legislative reasons, the ‘repeal and replace’ bills of both houses accomplish repeal indirectly by reducing the dollar amount of the penalties to zero.”

However, the legislation is controversial with some healthcare organizations, such as the American Hospital Association raising concerns about aspects of the law, and business groups such as the US Chamber of Commerce backing the law overhaul.

“The Senate proposal would likely trigger deep cuts to the Medicaid program that covers millions of Americans with chronic conditions such as cancer, along with the elderly and individuals with disabilities who need long-term services and support,” said Rick Pollack, president of American Hospital Association. “Medicaid cuts of this magnitude are unsustainable and will increase costs to individuals with private insurance.”

Legislation approval could be an uphill battle.

“As in the House, Senate Republicans have to walk a fine line between conservative and moderate members of their caucus to secure the support of at least 50 senators, meaning Republicans can afford to lose only two members of their 52-seat caucus,” wrote Ilyse Schuman and Michael Lotito, shareholders at employment law firm Little Mendelson in a news analysis.

“To avoid filibuster of the legislation in the Senate, Republicans are using the budget reconciliation process to try to pass legislation to repeal and replace the ACA with a simple majority vote,” Schuman and Lotito wrote. “Vice President Mike Pence would provide the 51st vote, if needed. Even with the lower-voting threshold of the reconciliation process, the climb to 50 votes appears steep.”

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