Capitol Hill

On Jan. 1, 2016, the employer-related provisions of the Affordable Care Act (ACA) finally will be fully implemented. On that date, employers with 50 or more "full-time equivalent employees" as defined in the law will be required to provide affordable health care benefits to their employees or pay a penalty to the Internal Revenue Service (IRS). With this final implementation step completed, the ACA will affect many more NRCA members.

It still is unclear whether the ACA will be successful with making health care benefits affordable and expanding coverage to more uninsured persons at an acceptable cost to taxpayers. What will happen in the long term to the ACA largely will be determined by the perceived success of the law among voters and the outcome of the 2016 elections.

In the near term, it is clear President Obama will not accept any major changes to his signature legislative achievement. As a result, NRCA is focused on urging Congress to adopt modest changes to the ACA that will reduce potential adverse effects of the law on employers and employees, such as losing current health plans or experiencing large premium increases. Specifically, NRCA supports two bills that would implement small changes in the ACA that would benefit employers and employees who receive coverage through their employment.

The first bill

First, NRCA endorsed the Protecting Affordable Coverage for Employers (PACE) Act, which is designed to reduce burdens from the ACA on employers and workers in firms with 51 to 100 employees. As written, the ACA mandates state small-group insurance markets, which traditionally have covered firms with 1 to 50 employees, be expanded to cover firms with up to 100 employees as of Jan. 1, 2016. This would require many firms with 51 to 100 employees to change health plans and could result in increased premiums for such firms because most state small-group insurance markets have many more mandates and regulations than large-group markets.

By preventing the scheduled expansion of the small-group markets under the ACA from being implemented, the PACE Act will reduce potential adverse effects on employers and employees. The legislation merely allows states to expand the small-group market if they wish but are not mandated to do so by the federal government. As such, the PACE Act will protect the existing health plans of many businesses that now operate in state large-group markets but would be subject to the increased regulation of small-group markets if the ACA mandate takes effect.

The PACE Act enjoys broad bipartisan support and was approved by the House and Senate. President Obama signed the bill into law in early October.

The second bill

Second, NRCA is supporting the Commonsense Reporting and Verification Act, which would streamline and clarify ACA's employer reporting requirements. This bipartisan legislation is designed to make the ACA less burdensome on employers and individuals by making a number of changes to the law.

Under the ACA's reporting requirements, employers and insurance companies are required to gather numerous pieces of data monthly and report them annually to the IRS. The information is intended to verify compliance with individual and employer mandates and administer advanced premium tax credits and subsidies under state and federal insurance exchanges. The information required to be reported is complex for employers and individuals and must be reported to the IRS at the end of a tax year, not during the enrollment process when it could provide more clarity regarding which individuals are eligible for tax credits.

To address this situation, the bill would amend the ACA to create a streamlined reporting system for employers. It also would protect employees' privacy by eliminating the requirement that employers and insurers collect dependents' and spouses' Social Security numbers. These and other reforms will result in a reporting process that is more manageable for employers.

The Commonsense Reporting and Verification Act also has significant bipartisan support and Congress could act on it in 2015 or 2016.

The fight continues

NRCA opposed the ACA when it was enacted in 2010, and a majority of members would prefer market-oriented policies to reform health insurance markets rather than government mandates. NRCA is committed to advancing positive changes such as the PACE and Commonsense Reporting and Verification acts to reduce burdens on employers and workers and make health care coverage as affordable as possible.

Duane L. Musser is NRCA's vice president of government relations.