113th Congress, Vote 495; House of Representatives #3522

Employee Health Care Protection Act of 2013

Official Title: To authorize health insurance issuers to continue to offer for sale current group health insurance coverage in satisfaction of the minimum essential health insurance coverage requirement, and for other purposes.

HR 3522: Employee Health Care Protection Act of 2013 (and 2014)
Passed by the House September 11, 2014, 247-167 (17 abstaining).

Synopsis: This bill would allow – but not require – small group health insurance plans in existence in 2013 to continue to be offered for sale (outside the SHOP exchanges) until December 31, 2018, five years longer than allowed under the ACA.

These plans would be considered minimum essential coverage, so enrollees would be in compliance with the individual mandate and would not be subject to penalties under the ACA.

In addition, such plans would be considered grandfathered under the ACA, meaning they could continue in force indefinitely as long as no substantial changes are made to the plan.

The ACA instituted a variety of reforms in the small group (fewer than 50 full-time equivalent employees) insurance market, most of which were scheduled to take effect January 1, 2014. Small group plans not compliant with the ACA’s requirements could no longer be sold after December 31, 2013, and grandfathered status only applied to plans that were already in force when the ACA was signed into law on March 23, 2010.

Ultimately, in the fall of 2013, HHS agreed to allow existing non-grandfathered health plans to be renewed into 2014 at state and carrier discretion, and that provision was extended again in March 2014. But this transitional provision didn’t go nearly as far as HR 3522, since it didn’t allow for the sale of non-compliant policies after December 31, 2013, and it didn’t confer grandfathered status to 2013 plans.

Why supporters pushed for this bill

• Although President Obama repeatedly said “if you like your health plan, you can keep your health plan,” there were numerous factors that ultimately made that a tough promise to keep. Supporters of HR 3522 note that the legislation would make it easier for people to keep their existing group coverage, at least for the next several years.
• Allowing carriers to continue to offer non-compliant small group plans would keep premiums for those policies lower than premiums would otherwise be if all plans had to become ACA-compliant.
• The Congressional Budget Office (CBO) estimated that HR 3522 would increase federal revenue by a total of $1.25 billion over the fiscal years 2015 to 2024. This is due to the fact that a slightly higher portion of employee compensation would go to taxable wages, and a slightly lower portion would go to pre-tax health insurance premiums. Obviously this can be seen as a drawback too, since the increased federal revenues are a result of higher total tax amounts.
• ACA opponents generally support HR 3522 as they view it as a path towards repealing the law, or dismantling it part by part.

Why opponents tried to stop the bill

• Although HR 3522 was introduced in late 2013, it wasn’t approved by the House until September 2014. By that time, carriers in the small group market had been selling new ACA-compliant health plans for almost nine months; it was unlikely that they’d be willing to go back and start selling their old plans again, potentially undercutting their new ACA-compliant market.
• The bill was ostensibly marketed in response to the uproar in late 2013 surrounding the President’s promise that “if you like your health plan, you can keep it.” But nothing in the bill requires insurers to renew health plans that were scheduled for cancellation in late 2013, or to revive health plans that had already been cancelled prior to the bill’s passage in 2014.
• Allowing the sale of non-compliant health plans in 2014 and beyond would essentially eliminate some of the most important provisions of the ACA, including the ban on utilizing a group’s health status when setting rates, and the requirement that all small group plans cover the ACA’s ten essential benefits.
• Healthier groups would be more likely to enroll in non-compliant health plans, while groups with older or less healthy members would be more likely to enroll in ACA-compliant plans. The expected result is that premiums for ACA-compliant small group plans would be slightly higher if HR 3522 were enacted.
• The CBO estimated that in 2016, two million people would enroll in small group health insurance plans that were not compliant with the ACA if HR 3522 were enacted. That’s two million people who wouldn’t have access to the full range of consumer protections offered under the ACA (total enrollment would be unlikely to change, but the mix of enrollees in compliant versus non-compliant plans would be impacted).

09/11/2014

Status: House passed

More: select a member to see his or her other key health care votes.