Health and Welfare Plans (Including Obamacare and HIPAA)

February 13, 2018

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From "Obamacare" to "Trumpcare"

Enacted Legislation

  • The Bipartisan Budget Act of 2018 was enacted on February 9, 2018.  The law ‎contains provisions that (i) (A) remove the six-month prohibition on contributions to retirement plans after a hardship withdrawal, (B) permit employers to extend hardship distributions from certain retirement plans to certain amounts not previously permitted, (C) provide special disaster-related rules for use of retirement funds for individuals impacted by the California wildfires, (D) provide relief for individuals whose retirement plans have been subject to a wrongful levy and (E) establish the Joint Select Committee on Solvency of Multiemployer Pension Plans to provide recommendations and legislative  language for the improvement of the solvency of multiemployer plans and the Pension Benefit Guaranty Corporation‎; and (ii) regarding the Affordable Care Act, (A) eliminate the Independent Payment Advisory Board, (B) reduce a portion of certain funding for the Prevention and Public Health Fund and (C) make certain changes to the ACA’s coverage-gap provisions for Medicare Part D.
  • H.R. 195 was enacted on January 22, 2018.  The law ‎contains provisions that (i) push back, until 2022, the effective date of the excise tax on employer-sponsored coverage that exceeds a certain threshold (“Cadillac Tax”) and (ii) place a moratorium on the health insurance provider fee (HIT) for the calendar year 2019.
  • The Tax Cuts and Jobs Act was signed into law by President Trump on December 22, 2017 that: (i) (A) extends the period during which a qualified plan loan offset amount may be contributed to an eligible retirement plan as a rollover contribution and (B) allows the conversion of IRA funds from a traditional IRA to a Roth IRA, but disallows other IRA conversions; (ii) (A) repeals key exceptions to the $1 million limitation on the deductibility of compensation under Section 162(m) (but provides a transition rule for grandfathered agreements), (B) revises the definition of “covered employee” under Section 162(m) and provides that once an employee qualifies as a covered employee, the deduction limitation will apply so long as the corporation pays remuneration to the employee (or to any of the employee’s beneficiaries), (C) expands the definition of “publicly held corporation” for Section 162(m) purposes to include any company that has reporting obligations under Section 15(d) of the Securities and Exchange Act of 1934, (D) imposes an excise tax of 21% on compensation in excess of $1 million and on "parachute" payments paid by a tax-exempt organization to certain of its employees, (E) imposes Section 162(m)-like provisions on tax-exempt organizations, (F) imposes Section 280G-like provisions on tax-exempt organizations, (G) expressly makes Section 83—including  the Section 83(b) deferral rules—generally inapplicable to restricted stock units, (H) allows certain employees of certain non-publicly traded corporations that settle stock options or restricted stock units in the form of stock to defer income recognition for five years, and (I) generally requires a three-year holding period in order for service providers to have long-term capital gains from carried interests granted with respect to real-estate and investment businesses; (iii) (A) suspends the exclusion from income for qualified moving expense reimbursements, (B) suspends the exclusion from income for qualified bicycle commuting reimbursements and (C) allows Section 529 plans to be used for expenses relating to students at public, private and religious elementary and secondary schools, and for students that are home schooled; and (iv) reduces the penalty for failure to purchase health insurance coverage enacted as part of the Affordable Care Act to zero.

Executive Orders and Memoranda

  • Executive Order on Promoting Healthcare Choice and Competition Across the United States dated October 12, 2017, sets forth the policy of the executive branch to (i) expand the availability of and access to alternatives to Obamacare insurance; (ii) re-inject competition into healthcare markets; and (iii) improve access to and the quality of information that Americans need to make informed healthcare decisions. The Executive Order requires (i) the Secretary of Labor to consider proposing regulations or revising guidance to expand access to health coverage; and (ii) the Secretaries of the Treasury, Labor and HHS to consider proposing regulations or revising guidance that would (A) expand the availability of certain short-term insurance and (B) generally facilitate the use of health reimbursement arrangements.
  • Executive Order on Enforcing the Regulatory Reform Agenda dated February 24, 2017, requires each agency to establish a Regulatory Reform Task Force that will, at a minimum, attempt to identify regulations that: (i) eliminate jobs, or inhibit job creation; (ii) are outdated, unnecessary, or ineffective; (iii) impose costs that exceed benefits; (iv) create a serious inconsistency with regulatory reform initiatives and policies; (v) are inconsistent with section 515 of the Treasury and General Government Appropriations Act or the guidance thereunder; or (vi) derive from or implement other Executive Orders or Presidential Directives that have been subsequently rescinded or substantially modified. Each Task Force is required to provide the agency head a report detailing the progress within 90 days of the order. The order extends to, among other agencies, the Department of Health and Human Services.
  • On January 20, 2017, President Trump signed an Executive Order, which, pending the repeal of the Patient Protection and Affordable Care Act, orders federal agencies to ease economic and regulatory burdens of the Act.

Bills Passed in the House or Senate

  • A bill (S. 1) was passed in the Senate on December 2, 2017 by a vote of 51-49 that would: (i) (A) extend the period during which a qualified plan loan offset amount may be contributed to an eligible retirement plan as a rollover contribution, (B) repeal the special rule that allows IRA contributions to one type of IRA (either traditional or Roth) to be recharacterized as a contribution to the other type of IRA, (C) apply a single aggregate limit for contributions to 403(b) plans and 457(b) plans, (D) repeal current rules allowing additional elective deferrals and catch-up contributions to 403(b) plans and Section 457(b) plans, (E) repeal the rule allowing employer contributions to 403(b) plans for up to five years after termination of employment, and (F) allow Section 529 plans to be used for expenses relating to students at public, private and religious elementary and secondary schools, and for students that are home schooled; (ii) (A) repeal key exceptions to the $1 million limitation on the deductibility of compensation under Section 162(m), (B) impose an excise tax of 20% on compensation in excess of $1 million and on "parachute" payments paid by a tax-exempt organization to certain of its employees, (C) cause Section 83(b) elections to be no longer be available with respect to restricted stock units, (D) allow certain employees of certain non-publicly traded corporations that settle stock options to defer income recognition for five years and (E) generally require a three-year holding period in order for service providers to have long-term capital gains from carried interests granted with respect to real-estate and investment businesses; (iii) (A) repeal the exclusion from income for qualified moving expense reimbursement, (B) repeal the exclusion from income for qualified bicycle commuting reimbursements; and (iv) reduce the penalty for failure to purchase health insurance coverage enacted as part of the Affordable Care Act to zero.
  • H.R. 1 was passed by the House of Representatives on November 16, 2017 by a vote of 227-205 that would (i) (A) make certain modifications to the nondiscrimination rules governing tax-qualified retirement plans, (B) permit in-service distributions under tax-qualified "pension" plans and Section 457(b) governmental plans at age 59-½, (C) direct Treasury to modify regulations preventing a participant from continuing to make deferrals after the receipt of a hardship distribution, (D) allow earnings in certain plans to be distributed on account of hardship, (E) extend the period during which a qualified plan loan offset amount may be contributed to an eligible retirement plan as a rollover contribution, (F) repeal the special rule that allows IRA contributions to one type of IRA (either traditional or Roth) to be recharacterized as a contribution to the other type of IRA and (G) allow up to $10,000 per year under a Section 529 plan to be used for expenses relating to students at private elementary and secondary schools, and allow parents to establish Section 529 plans for unborn children; (ii) (A) repeal key exceptions to the $1 million limitation on the deductibility of compensation under Section 162(m), (B) impose an excise tax of 20% on compensation in excess of $1 million and on "parachute" payments paid by a tax-exempt organization to certain of its employees, (C) cause Section 83(b) elections to no longer be available with respect to restricted stock units and (D) generally require a three-year holding period in order for service providers to have long-term capital gains from carried interests granted with respect to real-estate and investment businesses; and (iii) (A) limit the amount that may be excluded from gross income for employer-provided lodging and (B) repeal the exclusions for (I) dependent care assistance programs, (II) qualified moving expense reimbursements, (III) adoption assistance programs and (IV) employee achievement awards (and repeal the deduction limitation for such awards).
  • House Version of Trumpcare: On May 4, 2017, the House passed the revised American Health Care Act of 2017, H.R. 1628 as a step towards the effort to repeal and replace the Patient Protection and Affordable Care Act. By way of background, the bill is a revised version of the reconciliation measure previously introduced on March 20, 2017 by Rep. Diane Black and an amendment in the form of H.R. 2192. On March 24, 2017 the House proceeded with debate; however, a vote on the bill was postponed. On April 6, 2017 the Rules Committee presented H. Res. 254 to the House to provide for further consideration of the American Health Care Act of 2017. Prior to the introduction of the bill by Rep. Black, on March 6, 2017 the House Committee on Energy and Commerce and the House Committee on Ways and Means had submitted proposals for consideration by the Budget Committee. 

Dechert published a Newsflash addressing the foregoing, which may be viewed here

  • H.R. 7 was introduced to the House by Christopher Smith on January 13, 2017 and has 101 Representatives who are cosponsoring the bill and has been sent to several House committees for review. On January 23, 2017, the rules Committee resolution H.Res.55 was passed by the House which provides for consideration of this bill and this bill was closed to amendments. On January 24, 2017, this bill was considered, debated and passed by a vote of 238 – 183 in House. This bill, in part, clarifies the application of the prohibition to premium credits and cost-sharing reductions under the Patient Protection and Affordable Care Act by disallowing refundable credits and cost-sharing reductions for coverage under a qualified health plan which provides coverage for abortion.

Bills Introduced in the House or Senate 

  • H.R. 1275World's Greatest Healthcare Plan of 2017, was introduced to the House on March 1, 2017 by Pete Sessions and the bill was referred to the House Committees on Energy and Commerce, Education and the Workforce and the House Ways and Means. The bill is aimed, in part, at eliminating the individual and employer health coverage mandates under the Patient Protection and Affordable Care Act and to expanding the choices for obtaining and financing affordable health insurance coverage. 
  • H.R. 1121Pre-existing Conditions Protection Act of 2017, was introduced to the House on February 16, 2017 by Greg Walden and has 42 Representatives co-sponsoring the bill. The bill was referred to the House Committees on Energy and Commerce, Education and the Workforce and the House Ways and Means. The bill is aimed, in part, at amending the Public Health Service Act to prohibit the application of pre-existing condition exclusions and to guarantee the availability of health insurance coverage in the individual and group market. The bill is contingent on the enactment of legislation repealing the Patient Protection and Affordable Care Act. 
  • H.R. 1072Obamacare Replacement Act, was introduced to the House on February 15, 2017 by Mark Sanford and has 5 Representatives co-sponsoring the bill. The bill was referred to the House Committees on Energy and Commerce, Education and the Workforce, the House Ways and Means and the House Judiciary. The bill is aimed, in part, at repealing provisions of the Patient Protection and Affordable Care Act and to provide private health insurance reform. 
  • H.R. 710Health Coverage Flexibility Act of 2017, was introduced to the House by Bill Flores on January 27, 2017 and referred to the House Committee on Ways and Means. The bill is aimed, in part, at amending the Patient Protection and Affordable Care Act to better align the grace period required for non-payment of premiums before discontinuing coverage under qualified health plans with such grace periods provided for under State law.
  • H.R. 706Plan Verification Fairness Act of 2017, was introduced to the House by Marsha Blackburn on January 27, 2017 and referred to the House Committee on Energy and Commerce. The bill is aimed, in part, at amending title I of the Patient Protection and Affordable Care Act to require verification for eligibility for enrollment during special enrollment periods.
  • H.R. 640, Transparency and Accountability of Failed Exchanges Act, was introduced to the House by Rick Allen on January 24, 2017, referred to the House Committee on Energy and Commerce and has four Representatives who are cosponsoring the bill. This bill is aimed, in part, at amending title I of the Patient Protection and Affordable Care Act to require a State awarded a Federal grant to establish an Exchange that terminates the State of operation of such an Exchange, provide for an audit of the use of grant funds and return funds to the Federal Government. 
  • H.R. 633Patient Fairness and Relief Act of 2017, was introduced to the House by Gregg Harper on January 24, 2017 and referred to the House Ways and Means Committee and the House Energy and Commerce Committee. This bill is aimed, in part, at authorizing health insurance issuers to continue to offer for sale health insurance coverage offered in the individual market before the enactment of the Patient Protection and Affordable Care Act and in satisfaction of the minimum essential health insurance coverage requirement. 
  • H.R. 628Guaranteed Health Coverage for Pre-Existing Conditions Act of 2017, was introduced to the House by Rodney Davis and Mike Coffman on January 24, 2017 and referred to the House Committee on Energy and Commerce. This bill is aimed, in part, at amending the Public Health Service Act to prohibit the application of preexisting condition exclusions and to guarantee availability of health insurance coverage in the individual and group market, contingent on the enactment of legislation repealing the Patient Protection and Affordable Care Act.
  • S. 222Obamacare Replacement Act, was introduced to the Senate by Rand Paul on January 24, 2017 and referred to the Senate Committee on Finance. This bill is aimed, in part, at repealing provisions of the Patient Protection and Affordable Care Act and providing private health insurance reform. 
  • S.191Patient Freedom Act of 2017, was introduced to the Senate by Bill Cassidy, Susan Collins and Shelley Moore on January 23, 2017, read twice and referred to the Committee on Finance. This bill is aimed at improving patient choice by allowing States to adopt market-based alternatives to the Patient Protection and Affordable Care Act that increases access to affordable health insurance and reduce costs while ensuring important consumer protections and improving patient care. 
  • H.R. 561Small Business Job Protection Act of 2017, was introduced to the House by Luke Messer on January 13, 2017 and referred to the House Committee on Ways and Means. This is a bill aimed at amending the Internal Revenue Code to modify the definition of “applicable large employer” for purposes of the employer mandate under the Patient Protection and Affordable Care Act.
  • H.R. 537Budget Process Accountability Act, introduced to the House by Andy Biggs on January 13, 2017, is a bill, in part, aimed at amending the Internal Revenue Code to provide an exemption to the individual mandate to maintain health coverage for individuals residing in counties with fewer than two health insurance issuers offering plans on an exchange and to requiring congressional staff to abide by the Patient Protection and Affordable Care Act with respect to health insurance coverage. 
  • S.106ObamaCare Repeal Act, introduced to the Senate by Ted Cruz on January 12, 2017, is a bill to repeal the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 in their entirety. 
  • H.R. 499No Exemption for Washington from Obamacare Act, was introduced to the House by Ron DeSantis on January 12, 2017 and has been referred to several Committees within the House. This is a bill aimed at requiring members of Congress and congressional staff to abide by the Patient Protection and Affordable Care Act with respect to health insurance coverage and for other purposes. 
  • H.R. 370, introduced to the House by Bill Flores on January 9, 2017, is a bill aimed at repealing the Patient Protection and Affordable Care Act and healthcare-related provisions in the Health Care and Education Reconciliation Act of 2010 and for other purposes. This bill was referred to a number of committees on the day it was introduced, including to the House Budget committee. The bill was referred to the Subcommittee on Health on January 25, 2017 and the Subcommittee on Indian, Insular and Alaska Native Affairs on February 10, 2017. 
  • H.R. 314Health Care Choice Act of 2017, introduced to the House by Marsha Blackburn on January 5, 2017, is a bill aimed at repealing title I of the Patient Protection and Affordable Care Act and to amend the Public Health Service Act to provide for cooperative governing of individual health insurance coverage offered in interstate commerce. 
  • H.R. 285Healthcare Tax Relief and Mandate Repeal Act, was introduced to the House on January 4, 2017 by Michael R. Turner, has eight Representatives who are cosponsoring the bill and has been referred to the House Committee on Ways and Means. This bill is aimed at amending the Internal Revenue Code to repeal the individual and employer health-insurance mandates. 
  • H.R. 246 was introduced to the House on January 4, 2017 by Kristi L. Noem, has 106 Representatives who are cosponsoring the bill and has been referred to several House committees. The bill is aimed at repealing the annual fee on health insurance providers enacted by the Patient Protections and Affordable Care Act. 
  • H.R. 277, American Health Care Reform Act of 2017, was introduced to the House on January 4, 2017 by David Roe and has 25 Representatives who are cosponsoring the bill and has been sent to several House committees for review. On January 19, 2017 and January 25, 2017, the bill was referred to the Subcommittee on Health by the House Committees on Veterans’ Affairs and Energy and Commerce, respectively. On February 10, 2017, the House Committee on Natural Resources referred the bill to the Subcommittee on Indian, Insular and Alaska Native Affairs. The bill is aimed, in part, at repealing the Patient Protections and Affordable Care Act and related reconciliation provisions. 
  • H.R. 177 was introduced to the House by Steve King on January 3, 2017 and has been referred to the House Committee on the Judiciary. On January 13, 2017, this bill was referred to the Subcommittee on the Constitution and Civil Justice by the House Judiciary. This bill would bar Supreme Court decisions in certain Patient Protection and Affordable Care Act cases from citation. 
  • H.R. 35Health Savings Act of 2017, was introduced to the House on January 3, 2017 by Michael C. Burgess and has three Representatives cosponsoring the bill. On January 12, 2017 the bill was referred to the Subcommittee on Regulatory Reform, Commercial and Antitrust Law. This bill is aimed at amending the Internal Revenue Code with respect to Health Savings Accounts (“HSAs”), in part, to increase the maximum HSA contribution limit to match the amount of the deductible and out-of-pocket expenses under a high deductible health plan and to expand the definition of an HSA compatible plan to include bronze, silver and catastrophic plans on an exchange. 
  • H.R. 208, Ensuring Health Care Opportunities Act, was introduced to the House by Don Young on January 3, 2017 and has been referred to the House Committee on Energy and Commerce. This bill is aimed at waiving the essential health benefits requirements for certain states. 
  • H.R. 175, ObamaCare Repeal Act, was introduced to the House on January 3, 2017 by Steve King and has 35 Representatives who are cosponsoring the bill and has been sent to several House committees for review. The bill was referred to the Subcommittee on Health on January 25, 2017 and the Subcommittee on Indian, Insular and Alaska Native Affairs on February 10, 2017. This bill is aimed, in part, at repealing the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. 
  • H.R. 6514 was introduced to the House by Leonard Lance on December 8, 2016. This bill is aimed, in part, at amending the Patient Protection and Affordable Care Act to redirect user fees assessed on health insurance issuers on the Federal Exchanges. 
  • H.R. 6300, Unaffordable Care Act, was introduced to the House by Luke Messer on November 14, 2016, has nine co-sponsors and was referred to the House Committee on Ways and Means. This bill is aimed, in part, at amending the Internal Revenue Code to exempt from the requirement to maintain minimum essential health coverage an individual who resides in a location with fewer than two qualified health plans offered through an exchange established under the Patient Protection and Affordable Care Act, and was covered under minimum essential coverage for the last month of the preceding year and the premium is at least 125% of the premium for that month.

Resolutions

  • H.Res.254 was introduced to the House on April 6, 2017 by Pete Sessions providing for further consideration of H.R.1628 to provide for reconciliation pursuant to title II of the concurrent resolution on the budget for fiscal year 2017.
  • H.Res.154 was introduced to the House on February 27, 2017 by Joseph P. Kennedy III together with 15 co-sponsors and the resolution was referred to the House Committee on Energy and Commerce. The resolution requests that President Trump and the Secretary of Health and Human Services transmit certain information to the House relating to plans to repeal or replace the Patient Protection and Affordable Care Act and certain other health-related provisions.
  • H.Res.130 was introduced to the House on February 15, 2017 by Peter DeFazio and the resolution was referred to the House Committee on Energy and Commerce. The resolution is aimed at supporting efforts to increase competition and accountability in the health insurance marketplace and to extend accessible, qualify, affordable health care coverage to every American through the choice of a public insurance plan.
  • S.Con.Res.3 Concurrent Resolution sponsored by Sen. Michael B. Enzi introduced on January 3, 2017, which on January 13, 2017 was passed/agreed to in House by a vote of 227-198 and on January 12, 2017 was passed/agreed to in the Senate by a vote of 51-48. This resolution establishes the congressional budget for the federal government FY2017 and sets forth budgetary levels for FY2018-FY2026, and also establishes a deficit-neutral reserve fund for health care legislation and a reserve fund for health care legislation. 
  • This resolution paves the way for the reconciliation process, which would effectively allow a bill to be passed by the Senate with 51, rather than 60, votes. The House and the Senate are to submit reconciliation bills with recommendations to the respective House and Senate budget committees not later than January 27, 2017. We are not presently aware of a reconciliation bill introduced after the 2016 election in either the House or the Senate that specifically provides for the repeal of the Patient Protection and Affordable Care Act.

Legislative and Administrative Reports 

  • The U.S. Department of the Treasury issued a report on October 27, 2017, pursuant to Executive Order 13772, titled “A Financial System that Creates Economic Opportunities, Asset Management and Insurance,” which addresses, among other things, the promotion of long-term care insurance. The report states that (i) over the past several years long-term care insurance has “experienced a steep decline based primarily on the business decisions of numerous insurers to exit the market," (ii) the Treasury Department has determined that, given the “growing social need for [long-term care insurance] and the resulting strain on public resources, state and federal officials should collaborate on addressing the challenges of financing LTC,” and (iii) Treasury will convene an inter-agency task force to develop policies to complement reforms at the state level relating to the regulation of long-term care insurance, particularly as it relates to certain potential changes including allowing participants in employer-sponsored retirement plans to make penalty-free withdrawals to purchase long-term care insurance, creating long-term care savings accounts similar to Health Savings Accounts and establishing more generous tax incentives for long-term care insurance.
  • Report of the House Freedom Caucus (Dec. 14, 2016) recommendation #60 (remove “Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2018; Amendments to Special Enrollment Periods and the Consumer Operated and Oriented Plan Program” at 81 FR 94058).
  • Report of the House Freedom Caucus (Dec. 14, 2016) recommendation #64 (remove “Coverage of Certain Preventative Services under the Affordable Care Act” at 78 FR 39869).
  • Report of the House Freedom Caucus (Dec. 14, 2016) recommendation #65 (remove “Coverage of Certain Preventative Services under the Affordable Care Act” at 80 FR 41317).
  • Report of the House Freedom Caucus (Dec. 14, 2016) recommendation #73 (remove “Confidentiality of Substance Use Disorder Patient Records” at 81 FR 6987).
  • Report of the House Freedom Caucus (Dec. 14, 2016) recommendation #108 (remove “Patient Protection and Affordable Care Act: Benefit and Payment Parameters for 2018”).
HIPAA and other privacy-related matters, and matters relating to wellness

[Coming soon, as activity occurs]