July 31, 2017
Early on the morning of July 28th, members of the U.S. Senate voted 49-51 to reject a "skinny" version of a bill to repeal and replace the Affordable Care Act (ACA), called the Health Care Freedom Act. This followed 20-hours of heated debate and several other failed attempts in the Senate over the past weeks to repeal and/or replace the ACA.
Like the American Health Care Act passed by the House of Representatives on May 4, 2017, and the Senate's own repeal and replacement bill, the Better Care Reconciliation Act, as amended, the Health Care Freedom Act would have repealed the ACA's individual and employer mandate penalties, effective retroactively to December 31, 2015. However, the employer mandate repeal would have only been effective through 2024, and most other ACA provisions would have remained intact, including the reporting requirements under Internal Revenue Code Sections 6055 and 6056.
Because the Senate was unable to pass any ACA repeal or replacement bill, the Republicans' current effort to repeal and replace the ACA, is effectively ended -- at least for the time being. The ACA remains current law, and employers must continue to comply with all applicable ACA provisions, pending additional legislative developments or guidance to the contrary.
Following the vote, Senator McConnell indicated that Republicans now intend to focus on other legislative issues, although they remain committed to repealing the ACA. For example, the Senate may choose to reintroduce the Health Care Freedom Act, or pursue its own ACA repeal and replacement in the future, this time possibly working with the Democrats to come up with a solution. It has been reported that such a bipartisan effort is underway in the House of Representatives to do just that. Whether any of these efforts will gain traction is anyone's guess, however. It is also possible that the Trump Administration, through Executive Action, could pursue other ways to repeal and/or replace the ACA, including cutting off funding for ACA's subsidies and not enforcing specific ACA regulations.
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