To Retool or Repeal the ACA? That Is the Question

Pension & Benefits Daily™ covers all major legislative, regulatory, legal, and industry developments in the area of employee benefits every business day, focusing on actions by Congress,...

By Kristen Ricaurte Knebel

July 1 — The Affordable Care Act: Donald Trump and the Republicans want to dump it, Hillary Clinton wants to build on it. Regardless of who wins the election, employers might be fine with either avenue.

Presumptive Republican presidential nominee Trump has said that he wants to fully repeal the ACA, something that could add as much as $500 billion to the federal deficit over 10 years, according to a report, “Promises and Price Tags: A Fiscal Guide to the 2016 Election,” issued June 27 by the Committee for a Responsible Federal Budget. On the flip side, presumptive Democratic nominee Clinton wants to expand on the ACA, something the report says could cost as much as $300 billion over a decade.

Other Trump proposals include allowing individuals to deduct health insurance premiums and expanding health savings accounts. Clinton wants to repeal the almost universally disliked Cadillac tax. One thing both candidates agree on: They want to reduce prescription drug costs.

Either way on the ACA, employers may find themselves on the fence as to which scenario they’d prefer, Tracy Watts, senior partner with Mercer LLC in Washington, told Bloomberg BNA on June 30.

If faced with a full repeal of the ACA, Watts said, employers would be all for ditching the employer mandate, under which they potentially face penalties if they don't provide workers with health-care coverage that meets affordability and minimum-value standards. But the law's provisions requiring employers to allow dependent children to stay on their parents' plans up to age 26 and the elimination of lifetime coverage limits would be hard benefits to walk back because they are “hugely popular” with participants.

It Still Costs Money

While some provisions might be hard to take back, employers have more immediate concerns, such as the looming 40 percent excise tax on higher-cost health plans that is set to take effect in 2020, popularly known as the Cadillac tax.

Mercer released results of a survey in April that showed the biggest concern employers continue to have with the ACA is the Cadillac tax. Clinton has indicated she’s in favor of repealing the tax, something that the CRFB’s report estimates would cost $100 billion over 10 years. The tax was set to take effect in 2018, but Congress delayed it until 2020.

The survey also found that 34 percent of employers would “strongly favor” full repeal and replacement of the ACA and 20 percent would “favor” such a move. Watts attributes the support of full repeal in part to the costs that employers have put into implementing the law.

“There's been very little change in the number of people covered by employer-sponsored plans,” Watts said. Employers have done a lot of things to comply with the ACA “to cover the same people that they've always been covering,” she said.

Between the reporting requirements to the Internal Revenue Service that employers dealt with for the first time this year and the required communications with employees, employers are still spending a lot of money, Watts said. That means the money employers would save if the law were totally repealed might outweigh the costs they've already sunk into implementation.

“I think there are things that employers would be happy to no longer have to do,” she said.

To contact the reporter on this story: Kristen Ricaurte Knebel in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at

For More Information

The Committee for a Responsible Federal Budget's report is at

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.