On Monday, March 6, 2017, the Energy and Commerce Committee and the Ways and Means Committee of the U. S. House of Representatives released the American Health Care Act (the “Act”), which would repeal and replace portions of the Patient Protection and Affordable Care Act (the “ACA”).

Notable provisions in the Act that would affect employer-sponsored health plans include:

• Reduce to zero the penalty for employers that fail to offer minimum essential coverage to their employees.
• Reduce to zero the individual mandate to obtain health insurance.
• Replace income-based tax credits for purchasing private insurance with age-based tax credits.
• Encourage the use of health savings accounts by increasing the dollar limits on contributions and expanding permissible reimbursable expenses.
• Delay the so-called “Cadillac tax” until 2025.

The Act would preserve market reforms such as prohibiting denial of coverage based on pre-existing conditions and permitting adult dependents to stay on their parents’ plan until age 26.

This proposed bill is the first step in what may be a lengthy and contentious legislative process. Details are likely to change. Stay tuned for more information.

This client alert is intended to inform clients and other interested parties about legal matters of current interest and is not intended as legal advice. If you have any questions about these issues, please contact your Executive Compensation & Employee Benefits counsel at Smith, Gambrell & Russell, LLP.