H.R.2579 – Broader Options for Americans Act

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Week ending June 16, 2017

H.R.2579 – Broader Options for Americans Act

Brief

This bill has no effect until the American Healthcare Act, the Republican replacement for Obamacare, is enacted into law.

“Under current law, employment-based health plans are generally required to offer employees and their families the option to continue coverage, without any subsidy from the employer, for a period of time following certain events that would have terminated the coverage, such as the employee no longer working for the employer.” – crs The requirement comes under the Consolidated Omnibus Reconciliation Act of 1985 (COBRA) the Employment Retirement Income Security Act of 1974.

“Under AHCA, the premium assistance tax credit allowed under current law would be replaced by a new credit and a new definition of qualified health plans to which the new credit would apply. H.R. 2579 would amend provisions of AHCA to include unsubsidized continuation coverage under the new definition of qualified health plans, allowing people covered by such a plan to receive the new credits.” – crs

The bill amends the American Health Care Act of 2017 to allow such an individual to receive the refundable tax credit with respect to unsubsidized COBRA continuation coverage.

The provision is contingent on enactment of the AHCA and will apply (if at all) to months beginning after December 31, 2019, in taxable years ending after that date.

 (Full text of H.R.  2579 at congress.gov)

SponsorRep. Tiberi, Patrick J. [R-OH-12] (Introduced 05/19/2017)

Status: Passed House /

VOTES and FLOOR ACTION

HOUSE

On Passage: On passage Passed by the Yeas and Nays: 267 – 144 (Roll no. 308)

House Amendments:

Motion to recommit:

Text of the motion:

SENATE

On Passage:

Procedural Actions:

Senate Amendments:

COST AND IMPACT

Cost to the taxpayers:  Because the effects of the bill would be contingent upon enactment of subsequent legislation, the staff of the Joint Committee on Taxation estimates that the bill would in isolation have no effect on revenues or direct spending relative to current law

Pay-as-you-go requirements:  pay-as-you-go procedures do not apply

Regulatory and Other Impact: JCT has determined that the bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.

Dynamic Scoring:   CBO and JCT estimate that enacting the bill would not increase on-budget deficits or net direct spending by more than $5 billion in any of the four 10-year periods beginning in 2028.

Tax Complexity:  Not applicable to this bill.

Earmark Certification:  Data not available

Duplication of programs: Data not available

Direct Rule-Making:  Data not available

Advisory Committee Statement: Data not available

Budget Authority: Data not available

Constitutional Authority:   Assumed.

 

More Bill Information:

VII. DISSENTING VIEWS

 

H.R. 2579 (Tiberi, R-OH) amends H.R. 1628, the American Health Care Act (AHCA), to allow people to receive tax credits for Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) coverage if they have elected their COBRA coverage upon separation from employment and are paying the entire premium out of pocket. H.R. 2579 amends a bill that has not yet passed the Senate or become law.

COBRA requires employers to offer eligible employees who lose their health benefits due to a qualifying event (e.g., loss of a job) to continue group health insurance benefits for up to 18 months at the employee’s own cost. Under COBRA, an individual pays the full cost of the premiums plus a two percent (2%) administrative fee. Most individuals eligible for COBRA do not select this coverage option because of the high, unsubsidized cost at a time when income is often declining. Prior to the Affordable Care Act (ACA) market reforms, COBRA was important for individuals leaving a job who were often unable to access affordable individual market health insurance because of pre-existing conditions and underwriting. While COBRA remains important for some families, because individuals separating from their employers have had access to coverage in the individual market without concerns about underwriting, pre-existing condition discrimination or outright denial of coverage, coupled with the availability of premium subsidies,

COBRA coverage has declined in importance. Under current law, individuals separating from their employer may be eligible for financial assistance to purchase

coverage through the ACA exchanges. The advanced premium tax credits are adjusted for the cost of the insurance, as well as income. Individuals who separate from their employer and are eligible for unsubsidized COBRA are eligible for premium tax credits for marketplace plans as they no longer have an offer of employer-sponsored coverage.

H.R. 2579 does not address the underlying harm and inadequacies in the AHCA. H.R. 2579 does nothing to improve the inadequate tax credits under AHCA, which are unlikely to provide meaningful assistance for the individual market or for COBRA plans. AHCA also repeals the cost-sharing assistance that helps Americans afford the out-of-pocket costs associated with medical visits. AHCA allows insurance companies to discriminate against older workers by charging five times or more what they charge younger people; the result is lower quality coverage and higher out of pocket costs for older Americans by nearly 70 percent. Middle-class families could be particularly hard hit by this bill, while millionaires and billionaires would get a tax cut.

Potential for harm of employer group health insurance risk pools. The underlying Republican bill, AHCA, passed without a hearing or any opportunity for public comment. Employer and their current employees and retirees could be negatively impacted by this proposal as it could encourage older sicker workers to remain in the risk pool for longer periods of time. For a large employer this might not present burden, but for a smaller employer, retaining former employees on the insurance plan could increase premiums. However, the Committee does not know whether this is the case because the proposal was not examined prior to Committee action.

H.R. 2579 is another Republican attempt to distract from the underlying problems with the AHCA. The AHCA would cause 23 million Americans to lose health insurance coverage, erode important consumer protections and raise costs for countless more Americans. Higher costs and less coverage. All the while the AHCA provides a huge tax giveaway to the wealthiest. In fact, the 400 wealthiest Americans would get a $7 million tax cut every year. The Republicans put billionaires ahead of working families, and H.R. 2579 does nothing to fix the underlying bill’s significant problems. For these reasons we oppose the AHCA, H.R. 2579, and any amendments that do not address the underlying problems with the legislation.

Richard E. Neal,

Ranking Member.

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