Small Business Insurance

President Trump signed a budget spending deal passed by Congress that repeals significant taxes related to health care, including:

• Health Insurer Tax: Permanently repeals this Affordable Care Act (ACA) tax on commercial health coverage, Medicare Advantage, Medicare Part D and Medicaid plans, effective January 1, 2021. This tax was responsible for increasing commercial health premiums by almost 3% per year. 

• Cadillac Tax: Permanently repeals this 40% tax (part of ACA) on high-cost, employer-sponsored health benefits, effective January 1, 2020. 

• Medical Device Tax: Repeals the 2.3% tax (part of ACA) on medical device sales, effective January 1, 2020.

The same deal extends the Patient-Centered Outcomes Research Institute Fee (PCORI) to 2029. The PCORI Fee, which impacts fully-insured and ASO Small and Large Group plans, was set to expire for plan years ending after September 30, 2019. This tax is about $2.45 per covered life, adjusted for inflation. 

Two important individual market practices will continue, at least through the 2021 plan year: 

• Automatic re-enrollment in an individual’s health plan on the exchange

• Silver loading, which allows insurers to increase premiums on silver-level plans – which raises the premium tax credit — to make up for the loss of cost-sharing reductions

The deal also enacted the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, expected to improve speed-to-market for generic drugs. It does not include other major issues that were considered by Congress during 2019, including other provisions related to reducing drug prices or protecting patients from surprise medical bills. 

We’ll continue to share more information as it becomes available. 

Questions? Contact us to discuss. This article applies to:

• Nevada and Colorado

• Small Group and Large Group