The House of Representatives has passed a sweeping overhaul of the U.S. tax code after it was approved by the Senate early Wednesday morning. This controversial legislation will have a wide-reaching effect on American businesses and individuals, from business tax rates to a restructuring of tax brackets. Curiously for a tax bill, this bill could end up being one of the most important pieces of healthcare legislation since the passage of the Affordable Care Act (ACA) in 2010.
Originally branded as The Tax Cuts and Jobs Act, the Republican Tax Plan is set to abolish the Individual Mandate that penalizes people who do not have health insurance coverage and could lead to an estimated 13 million more uninsured according to the Congressional Budget Office (CBO).
But, what does this bill mean for employers and employer-sponsored health insurance?
Of the 13 million expected to lose coverage, 3 million will be on an employer-sponsored health plan. While this is a large increase in the total number of uninsured, it is not as significant when compared to the 150 million Americans who receive health insurance coverage from their employer. This means that while the coverage for individuals will see changes from the Republican Tax Plan, the employer market will remain largely untouched.
Right now, the best course of action is staying the course and continue reporting as required by the ACA, Said Benjamin Conley, Faculty of the Health Care Reform Center & Policy Institute and Principal for Seyfarth Shaw. Employer Mandate penalties, which is are $2,000 per employee for employers that don’t make an offer of coverage to 95 percent of their eligible employees, will still be assessed under the new tax plan. It is important to remain vigilant of any changes so you can ensure you are prepared and remain free of any costly fee or penalties.
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Where the bill could affect employers is in the realm of population and employee health. There is a strong link between health status and having health coverage. Therefore, reducing the number of insured Americans could cause a decrease in America’s overall health, leading to reduced productivity and efficiency. These problems could end up being what costs employers the most from this bill.
The Republican Tax Plan is not yet the law of the land, however. After the House of Representatives approved it for the second time it was voted in on Tuesday, but had to be revised because the bill violated Senate rules necessitating a second vote with the offending provisions removed it must move to President Donald Trump’s desk to be signed into law, which is expected to happen before Christmas.
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