House Ways & Means Committee Issues Report on Increasing Access to Lower Premium Plans Act
Excerpts of the report follow:
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill H.R. 6311, as reported by the
B. Background and Need for Legislation
Obamacare's flawed policies have increased the cost of coverage in the individual market by 105 percent over 2013-2017 on average. As
Obamacare's tax credits are only available to offset the cost of bronze, silver, gold, and platinum health care plans that are sold on the law's government-run health insurance exchanges. Catastrophic plans are not eligible for the premium tax credit. In addition, catastrophic plans are only available to those under age 30 or those over age 30 that qualify for a hardship exemption.
C. Legislative History
Background
H.R. 6311 was introduced on
Committee action
Committee hearings
The policy issues associated with tax pertaining to health care and the ACA were discussed at the following Ways and Means hearings during the 114th and 115th Congresses:
Full Committee Hearing on the Tax Treatment of Health Care (
Subcommittee on Health Member
Subcommittee on Health Hearing on Rising Health Insurance Premiums Under the Affordable Care Act (
Subcommittee on Health Hearing on Lowering Costs and Expanding Access to Health Care through Consumer-Directed Health Plans (
II. EXPLANATION OF THE BILL
A. Modification of Definition of Qualified Health Plan
PRESENT LAW
In general
A refundable tax credit (the "premium assistance credit") is provided for eligible individuals and families to subsidize the purchase of health insurance plans through an American Health Benefit Exchange ("Exchange"), referred to as "qualified health plans."1 The premium assistance credit is generally payable in advance directly to the insurer, as discussed below. However, eligible individuals may choose to pay their total health insurance premiums out-of-pocket and claim the credit at the end of the taxable year.
1Sec. 36B. Section 36B was enacted as part of the Patient Protection and Affordable Care Act ("PPACA"), Pub. L. No. 111-148, and modified by the Healthcare and Education Reconciliation Act of 2010 ("HCERA"), Pub. L. No. 111-152. PPACA and HCERA are referred to collectively as the Affordable Care Act ("ACA").
Qualified health plans generally must meet certain requirements.2 Special rules apply to certain qualified health plans, referred to as "catastrophic-only" qualified health plans, which are available only to individuals who are under age 30 or meet other specified requirements.3 The premium assistance credit is not available with respect to catastrophic-only qualified health plans.4 In addition, in the case of a qualified health plan that provides coverage for abortions for which Federal funds may not be used, no part of the premium assistance credit may be used for the portion of premiums attributable to that coverage.5
2Secs. 1301 and 1302 of PPACA.
3Sec. 1302(e) of PPACA.
4Under the Public Health Service Act ("PHSA") as amended by the ACA, health insurance must meet certain requirements. Section 1251 of PPACA excepts certain health plans sold at the time of enactment of PPACA from some of the PHSA requirements ("grandfathered" plans). The premium assistance credit is not available with respect to a grandfathered plan or plans that receive similar treatment under administrative guidance.
5Sec. 1303(b)(2) of PPACA.
The premium assistance credit is generally available for individuals (single or joint filers) with household incomes between 100 and 400 percent of the Federal poverty level ("FPL") for the family size involved. Household income is defined as the sum of: (1) the individual's modified adjusted gross income, plus (2) the aggregate modified adjusted gross incomes of all other individuals taken into account in determining the individual's family size (but only if the other individuals are required to file a tax return for the taxable year). Modified adjusted gross income is defined as adjusted gross income increased by: (1) any amount excluded from gross income for citizens or residents living abroad),6 (2) any tax-exempt interest received or accrued during the tax year, and (3) the portion of the individual's social security benefits not included in gross income.7 To be eligible for the premium assistance credit, individuals who are married must file a joint return. Individuals who are listed as dependents on a return are not eligible for the premium assistance credit.
6Sec. 911.
7Under section 86, only a portion of an individual's social security benefits are included in gross income.
An individual who is eligible for minimum essential coverage from a source other than the individual insurance market generally is not eligible for the premium assistance credit.8 However, an individual who is offered minimum essential coverage under an employer-sponsored health plan may be eligible for the premium assistance credit if an employee's share of the premium for self-only coverage exceeds 9.56 percent (for 2018) of the employee's household income, or the plan's share of total allowed costs of benefits provided under the plan is less than 60 percent of such costs (called "minimum value"), and the individual declines the employer- offered coverage. An individual who enrolls in an employer- sponsored health plan generally is ineligible for the premium assistance credit, even if the coverage is considered unaffordable or does not provide minimum value.
8Minimum essential coverage is defined in section 5000A(f).
As part of the process of enrollment in a qualified health plan through an Exchange, an individual may apply and be approved in advance for a premium assistance credit.9 The individual must provide information on income, family size, changes in marital or family status or income, and citizenship or lawful presence status.10 Initial eligibility for the premium assistance credit is generally based on the individual's income for the tax year ending two years prior to the enrollment period. The Exchange process includes a system through which information provided by the individual is verified with the
9Secs. 1411-1412 of PPACA. Under section 1402 of PPACA, certain individuals eligible for advance premium assistance payments are eligible also for a reduction in their share of medical costs, such as deductibles and copays, under the plan, referred to as reduced cost- sharing. Eligibility for reduced cost-sharing is also determined as part of the Exchange enrollment process.
10Under section 1312(f)(3) of PPACA, an individual may not enroll in a qualified health plan through an Exchange if the individual is not a citizen or national of
11Under section 6103, except as provided in the Code, returns and return information are confidential and may not be disclosed by the
REASONS FOR CHANGE
The Committee believes that tax credits provided to offset the cost of health plans provided on government exchanges should also be available to offset the cost of similar health plans offered outside the government exchanges. This would expand the choices available to individuals and families and empower them to make decisions based on their specific needs and budgets.
Furthermore, the Committee believes that Federal assistance in the form of premium tax credits should not be available for health plans that cover elective abortion. This would allow individuals to avoid directly, unwittingly, and unwillingly subsidizing abortion.
EXPLANATION OF PROVISION
Application of credit to additional coverage
Qualified health plans generally must meet certain requirements.12 Under the proposal, the premium assistance credit is available with respect to catastrophic plans13 that meet the requirements relating to qualified health plans. Under the proposal, the premium assistance credit is also available with respect to health plans that meet the requirements relating to qualified health plans except that they are not offered through an Exchange. Thus, an individual who purchases a qualified health plan in the individual market, but not through an Exchange, may be eligible for the premium assistance credit if the requirements for eligibility are otherwise met. However, advance premium assistance payments are not available with respect to a qualified health plan that is not purchased through an Exchange. An individual who purchases such a plan must claim the premium assistance credit on his or her income tax return.
12Section 2 of the proposal amends section 1302(e) of PPACA to allow all individuals purchasing health insurance in the individual market the option to purchase a lower premium plan that does not offer a bronze, silver, gold, or platinum level of coverage.
13As described in sec. 1302(e) of PPACA.
Under present law, any person that provides minimum essential coverage to an individual during a calendar year must report certain information to the IRS.14 The proposal requires additional information reporting for minimum essential coverage provided to an individual that is not enrolled through an Exchange.
14Sec. 6055(b).
As under present law, the credit is not available with respect to grandfathered plans or plans that receive similar treatment under administrative guidance. In addition, the proposal specifies that the credit is not available with respect to grandmothered plans. Under the proposal, a grandmothered health plan is defined to be health insurance coverage which is offered in the individual health insurance market as of
15CCIIO guidance refers to the letters issued by the
Ineligibility of qualified health plans covering abortion
Under the proposal, the premium assistance credit is not available with respect to a qualified health plan that provides coverage for abortions for which Federal funds may not be used.16 However, nothing in the proposal prohibits an individual from purchasing, or a health insurance issuer from offering separate coverage for abortions, or a health plan that includes abortions, as long as no premium assistance credit is allowed with respect to the premiums for such coverage and premiums are not paid for with any amount attributable to the premium assistance credit (or the amount of any advance payment of the credit).
16This includes coverage for abortions other than any abortion necessary to save the life of the mother or any abortion with respect to a pregnancy that is the result of an act of rape or incest. The treatment of any infection, injury, disease, or disorder that has been caused by or exacerbated by the performance of an abortion shall not be treated as an abortion for purposes of determining eligibility for the premium assistance credit.
EFFECTIVE DATE
The modifications to the premium assistance credit are generally effective for taxable years beginning after
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the
The vote on
(TABLE OMITTED)
In compliance with the Rules of the
The vote on the amendment offered by
(TABLE OMITTED)
In compliance with the Rules of the
The vote on the amendment offered by
(TABLE OMITTED)
In compliance with the Rules of the
H.R. 6311 was ordered favorably reported to the
(TABLE OMITTED)
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of the
The bill, as reported, is estimated to have the following effect on Federal fiscal year budget receipts for the period 2019-2028:
(TABLE OMITTED)
Pursuant to clause 8 of rule XIII of the Rules of the
B.
In compliance with clause 3(c)(2) of rule XIII of the Rules of the
C. Cost Estimate Prepared by the
In compliance with clause 3(d) of rule XIII of the Rules of the
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of the
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423 of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104- 4).
The Committee has determined that the bill does not contain Federal mandates on the private sector. The Committee has determined that the bill does not impose a Federal intergovernmental mandate on State, local, or tribal governments.
D. Applicability of House Rule XXI 5(b)
Rule XXI 5(b) of the Rules of the
E. Tax Complexity Analysis
Section 4022(b) of the Internal Revenue Service Restructuring and Reform Act of 1998 ("
Pursuant to clause 3(h)(1) of rule XIII of the Rules of the
F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff Benefits
With respect to clause 9 of rule XXI of the Rules of the
G. Duplication of Federal Programs
In compliance with Sec. 3(c)(5) of rule XIII of the Rules of the
H. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of
VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
B. Changes in Existing Law Proposed by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the Rules of the
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of the
INTERNAL REVENUE CODE OF 1986
DISSENTING VIEWS
H.R. 6311 Increasing Access To Lower Premium Plans Act of 2018
H.R. 6311 (Roskam, R-
H.R. 6311 continues Republican efforts to undermine and destabilize the health insurance market increases costs for consumers, and undermines women's health care, while at the same time growing our deficit.
H.R. 6311 would likely reduce choice and competition in the Affordable Care Act (ACA) marketplaces. While the bill would allow people buying individual-market plans outside the ACA marketplaces to receive ACA tax credits, the credits are only be available when individuals file their tax returns the following year (not upfront to help them pay premiums); this disadvantages more moderate-income families that do not have extra disposable income to pay premium costs up front. It also would eliminate the requirement that insurers selling plans eligible for the ACA tax credit must offer at least one "silver" and one "gold" plan through the marketplace-- reducing plan choice for patients. If this bill were enacted, an insurer could offer coverage only outside the marketplace (destabilizing the marketplace and undermining marketplace choice) while still giving consumers access to premium tax credits.
H.R. 6311 would likely lead to increased premiums for individuals with preexisting conditions. Reducing the incentives for insurers to offer marketplace coverage could make it easier for insurers to engage in strategies to attract only healthier enrollees, such as offering only bronze or catastrophic plans, which have higher deductibles and other cost-sharing expenses for consumers than silver and gold plans. It also could reduce plan choices for consumers within the marketplaces if insurers shift to off-marketplace business. And it could prompt fewer consumers to comparison shop in the marketplaces--where they can compare premiums and benefits for multiple insurers--thus reducing competitive pressure on insurers to hold down premiums.
Legislation busts the deficit to benefit the wealthy, again. The
Coalition members of All* Above All, which includes the
Ranking Member
The full text of the report is found at: https://www.congress.gov/congressional-report/115th-congress/house-report/849/1?r=5
TARGETED NEWS SERVICE:
House Ways & Means Committee Issues Report on Improving Seniors Access to Quality Benefits Act
A.M. Best Affirms Credit Ratings of Provident Insurance Corporation Limited
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News