Employers and the future of the Affordable Care Act

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January 2017

Overview

Repealing the ACA is a top policy priority for President-elect Trump and Republicans in Congress, and many have suggested they will vote on repeal early in 2017. The likely vehicle will be a budget reconciliation bill that the Senate Republicans can pass with a simple majority vote, which they have. However, full repeal of the ACA is not feasible through budget reconciliation because that would be limited to items that have an impact on the federal budget (expenditures or revenues). Repeal via budget reconciliation is likely to include removing penalties for the individual and employer mandates for health coverage, cancelling premium tax credits and subsidies for insurance purchased on Exchanges, and eliminating taxes and fees such as the health insurance provider, medical device and high-cost employer plans (‘Cadillac tax’) tax, the 3.8% tax on net investment income and the 0.9% Medicare premium surcharge on higher incomes.

However, lawmakers understand that there could be significant disruptions in coverage and care if full repeal were to take effect immediately. Therefore, a delay of up to several years could apply to various repeal provisions.

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Kelley McLaughlin

US Tax Marketing Leader, PwC US

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