The Wagner Law Group
Wagner Law Group is a nationally recognized practice in the areas of
ERISA and employee benefits, estate planning, employment,
labor and human resources, investment management and real
in 1996, The Wagner Law Group has 28 attorneys engaged
exclusively in employee benefits, estate planning and
employment law. Six of our attorneys are AV rated by
Martindale-Hubbell as having very high to preeminent legal abilities
and ethical standards. The firm is among the largest ERISA boutiques
in the country. Our practice is national in scope, with clients in
more than 40 states and several foreign countries.
Wagner Law Group
Connecticut Ave., N.W.
Fax: (561) 293-3591
7108 Fairway Drive
Palm Beach Gardens, FL 33418
East Kennedy Boulevard
Tampa, FL 33602
Francisco, CA 94104
100 South 4th Street, Suite 550
St. Louis, MO 63102
March 16, 2017
Health and Welfare Law
Committees Release Proposals to
House of Representatives Committees have each released separate
budget proposals that, after review and mark-up, will form the
American Health Care Act ("AHCA"), the first in a series of
legislation that is intended to replace the Affordable Care Act (the
"ACA"). The two House Committee bills repeal many of
the taxes imposed under the ACA and significantly change the ACA's
revisions to the Medicaid program and its funding. Below are
highlights from the legislation that impact employer-sponsored group
Employer and Individual Mandate Penalties. The AHCA
essentially repeals the ACA's Employer Shared Responsibility Penalty
(i.e., the "Employer Mandate" Penalty) and the Individual
Shared Responsibility Penalty (i.e., the "Individual
Mandate Penalty") by reducing the respective penalties to $0,
retroactively to January 1, 2016.
Tax Credits. The AHCA would replace the ACA's
income-based group health premium tax subsidies with advanceable,
refundable tax credits to purchase either health insurance coverage
offered through a state's health insurance marketplace or
unsubsidized COBRA coverage under an insured employer's group health
policy. The credit increases from $2,000 to $4,000 based on age
and phases out after the taxpayer's adjusted gross income exceeds
$75,000 ($150,000 for joint filings). Coverage purchased with the
credits must meet criteria that differ from the ACA requirements.
Employer Reporting. The AHCA does not modify the
ACA-imposed employer reporting requirements under Internal Revenue
Code Sections 6055 and 6056. This means, as of now, employers
must continue with their efforts to satisfy their ACA reporting
obligations (i.e., Forms 1094/B-C and 1095/B-C).
Limits on Health Flexible Spending Account ("Health
FSA"). The AHCA removes the ACA's annual cap on
employee pre-tax contributions to Health FSAs (currently $2,600 for
2017). The AHCA also re-authorizes pre-tax reimbursements for
certain medical expenses (e.g., over-the-counter
medications). The proposed effective date for these
modifications is January 1, 2018.
Health Savings Accounts ("HSAs"). The AHCA
modifies the tax rules related to HSA contributions and
reimbursements as follows:
the annual contribution limit to equal the IRS's HDHP annual
out-of-pocket limits (for 2017, $6,550 for self-only coverage
and $13,100 for family coverage). The ACA currently limits
annual HSA pre-tax contributions to $3,400 for self-only coverage
and $6,750 for family coverage.
HSA-eligible spouses who are over age 55 to make an additional
$1,000 "catch up" contribution to the same HSA.
Current law requires qualifying, HSA-eligible spouses to each
make catch up contributions to a separate HSA.
- Reduces the
ACA's tax on impermissible HSA distributions to
The proposed effective date
for these changes is January 1, 2018.
ACA Provisions Unaffected by AHCA. The AHCA does not
affect the following ACA provisions that impact the coverage provided
by group health plans:
on annual and lifetime dollar limits on essential health
on pre-existing condition exclusions.
on "excessive" waiting periods.
to cover in-network, preventive services at no cost.
to offer coverage to dependent children to age 26.
- Limits on
the maximum out-of-pocket expenses for in-network services.
- Claims and
rescissions of coverage.
coverage and nondiscrimination requirements applicable to
insured group health plans.
Note: The AHCA only addresses ACA items that
are considered "budget related" and, therefore, cannot be
filibustered. Other parts of the agenda to amend and replace
the ACA will involve future non-budget item legislation, which will
need 60 votes to survive a filibuster in the Senate.