U.S. Budget Bill: Impact on Health Insurance

On January 22nd, 2018 the President signed a continuing resolution to fund the federal government for 3 more weeks. While the main focus was on the Government reopening after a long 3-day weekend, there were significant changes included in the bill affecting health insurance.

The biggest change is another delay in the ACA Cadillac Tax until January of 2022. This tax, when and if imposed, would implement a 40% excise tax on the richest health insurance pans. Initially it would have been implemented in 2018, but was delayed until 2020 and now 2022. Many industry groups, labor unions and municipal employers are opposed to this tax altogether as it imposes a significant financial and administrative burden on plans they sponsor.

The next change is a suspension of the Health Insurance Industry Tax (HIT). Another tax started by the ACA, this revenue generator was started in 2014, suspended for 2017, in affect for 2018, and now suspended again for 2019…confused yet? At the end of the day, any tax withheld from a health insurance carrier should help keep premiums in check.

Lastly, is another suspension of the Medical Device Tax. This tax was delayed in 2016 and 2017, and will now be delayed through 2019. While this will not have an immediate affect on premiums, it should help keep medical costs in check, thereby helping reduce premiums, somewhat, in the future.

Change. The one thing guaranteed in our health insurance system.

Stay tuned! We can assure you that more changes are on the horizon.