What if the Employer Mandate is Repealed?

As we watch Washington and the Republican plans to repeal and replace PPACA, it is understandable that employers are asking, "What if?"

While the AHCA has indeed passed the House, that the bill, and any repeal in general face an uncertain path in the Senate. Until a repeal and replace bill passes both the House and the Senate, and is signed by the President, Obamacare's employer mandates and penalties remain the law of the land.

Although the ACHA's future is undecided, employers are anxious to know the repeal's impact on employers. Our legislative alert outlines the modifications of plan design that could be considered, if a repeal does take place, including:

• Changing eligibility rules (hours worked requirements);
• Eliminating the offer of coverage to part time, seasonal or temporary employees;
• No longer using the monthly or look-back measurement methods to track hours;
• Altering or increasing employee contributions 
• Another important part of the, "What if" consideration is timing, communication and notification to participants, and ultimately written plan amendments and summary of material modifications (SMMs).

Employers that are making changes to eligibility rules, particularly mid-year changes, may want to consult with their legal counsel regarding any claims employees may assert concerning allegedly "vested" benefits or other ERISA concerns . Finally, many employers may decide to not make any changes, either at all or until next renewal, as the administrative costs and morale issues associated may not warrant a change.

As of this date, it appears certain ACA market reforms will remain in place, including waiting periods of 90 days. Our alert reviews this and other important planning points. Just remember, this is planning for "What if" and not the time to begin any implementation; For that, we await Washington and the Senate. As summer progresses, we should have a better idea of Senate actions and advise you of any plan design implications .