Senate Leadership Modifies Health Care Reform Proposal
Thursday, July 13, 2017
This morning Senate Republican leadership released changes to the health care reform legislation, the Better Care Reconciliation Act (BCRA), designed to address concerns of Republican members of the Senate on the previously released draft. Click here for links to a description of the modifications, a section-by-section description of the entire bill and the text of the entire bill. Some of the modifications made to the BCRA relating to HSAs and high deductible health insurance will be of interest to ECFC members.
Under the proposed modification of the BCRA, premiums for high deductible health insurance can be paid through an HSA – so long as the high deductible insurance does not provide for abortions (except if necessary to save the life of the mother or if the pregnancy is the result of rape or incest). In addition, the modification provides that HSA qualified medical expenses may include amounts paid for children under the age of 27. Combined with the increased deduction limit for HSAs contained in the earlier discussion draft of the BCRA, this change should increase the interest in HSAs.
The new draft does not modify the changes to tax provisions of the ACA in the earlier draft of the BCRA of interest to ECFC membership, such as the delay of the Cadillac tax, allowing over-the-counter drugs to be reimbursed from FSAs, HSAs and HRAs, elimination of the cap on FSAs and rollback of the excise tax on non-qualifying distributions from a HSA to pre-ACA levels. However, the modification does eliminate the repeal of the ACA taxes that impact higher income individuals, such as the net investment income tax and the additional Medicare Health Insurance tax.
Republican leadership intends to have the Senate consider the bill next week. These modifications are intended to garner support for the bill since at least 50 out of the 52 Republican members of the Senate must support the bill for it to move forward. The Congressional Budget Office (CBO) and the Joint Committee on Taxation will provide a score of the bill before it is considered. We will keep you apprised of the CBO score, any further modifications to the bill and when the bill will be considered on the Senate floor.