In his first televised interview after the election, the world watched as President-Elect Donald Trump departed from his former, rather resolute, campaign promise of free market reforms. During his campaign, Trump repeated his plans to “repeal and replace” President Barack Obama’s health care law(the Affordable Care Act, commonly known as “Obamacare”) saying at a rally, “it’s one of the single most important reasons why we must win on Nov. 8.”
Trump told 60 Minutes that healthcare is the number one thing that he plans to “get done right away,” and his campaign website proclaims, “On day one of the Trump Administration, we will ask Congress to immediately deliver a full repeal of Obamacare.”
As President-Elect Trump prepares to take office in January, his party has already announced proposed changes, making health care reform again a reality for Americans.
Proposed Plan Changes
In A Better Way, led by Rep. House Speaker Paul Ryan, Republicans share their vision for health care reform in 2017 and beyond. There’s strong support for repeal of the Employer Mandate, which under “Obamacare,” forces business owners to provide Washington-approved state-mandated benefit packages. Republicans plan to get rid of legislation requiring business owners to purchase “one-size fits all” coverage and instead allow insurance providers to sell across state lines, saying this will control costs, increase plan flexibility and coverage options by creating more competition.
Another new cost-control proposal potentially affecting small businesses is the addition of Association Health Plans (AHPs). An AHP is a pool of small businesses under an umbrella policy – in a proposed strength in numbers union – which is said will lower overhead costs by “improving bargaining power at the negotiating table.”
Read: Trump’s Presidency Could Flood The US with Foreign Business
Tax cuts for high-income taxpayers, insurance providers and corporations have also been proposed. To offset these tax cuts, Medicare benefits currently going to “nondisabled, working-age adults” living above the $11,880 poverty threshold will get cut and the income tax exclusion that allows workers to deduct insurance premiums from wages will be repealed.
According to Republicans, these reforms will fix the “Obamacare” system. There are, however, two ACA provisions Republicans and Trump currently agree on keeping: Children under the age of 26 will be able to remain on their parents’ plans and individuals cannot be denied coverage based on pre-existing conditions.
What Trump health care reform might mean for small business:
- Small businesses can say goodbye to the Small Business Health Options Program (SHOP), which under ACA provides tax credits to businesses who employ 25 or fewer full-time employees who earn $50,000 or less.
- Repeal of the Employer Mandate forcing businesses with 50 or more full-time employees to provide coverage.
- For employers with fewer than 50 employees who offer Health Reimbursement Arrangements (HRAs) instead of ACA, new provisions would exclude exemptions. The Congressional Budget Office (CBO) reports small employer job subsidies attributed to revenue losses of $266 billion in 2016 – and may grow to $3.6 trillion by 2026.
- High-income earners can expect relief from the Medicare tax enacted under ACA that raised taxes an additional .9% and 3.8% on payroll taxes, capital gains, investment and dividend income.
- Individual insurance providers will compete to sell products across state lines. Republicans say this will increase the quality and affordability of plans.
- Republicans want to offer Association Health Plans to increase negotiating power and lower costs for businesses.
While every proposed change in federal law takes time and negotiation, for now both the President-Elect and Republican-controlled Congress plan to offer a form of “patient-centered” coverage to shift responsibility away from employers and onto individuals. Reforms will not happen overnight, but based on the current proposed reforms, small business owners may have more flexibility in the coverage options they chose to offer employees.
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