Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
On Friday, House Democrats unveiled an 852-page rough draft of a healthcare reform bill prepared by members of the House Ways and Means, Energy and Commerce, and Education and Labor Committees. A copy of the full bill and summaries of its various components can be found here.
Employers and private insurers will be sure to take notice of the terms governing shared responsibility. According to a summary of these provisions, all Americans would be responsible for obtaining health insurance, with certain hardship exceptions. Employers would be required to chose between providing coverage for their employees or making a contribution on their behalf. If an employer chooses not to offer health coverage to its employees, a penalty would be assessed based on eight percent of its payroll. Employers that choose to offer health coverage would be required to contribute 72.5 percent of the cost of premiums for all full-time employees’ single health coverage or 65 percent for a family policy. Employers would have the option of providing part-time employees with health coverage by contributing a share of the expense, or contributing to the Health Insurance Exchange, a marketplace created by this bill in which individuals and employers could comparison shop among private and public insurers. In the fifth year after the Exchange begins, companies that offer health insurance would have to meet minimum coverage standards.
As for small businesses, employers with annual payrolls below a certain threshold would be exempt from these pay-or-play requirements. Others would be eligible to receive a tax credit for providing its employees with health insurance.
Other controversial aspects of this bill include the development of a public health insurance option, and guaranteed coverage and insurance market reforms. For example, insurance companies would be barred from discriminating on the basis of health status, pre-existing health conditions, and gender, among other factors. This bill would also prohibit lifetime and annual limits on benefits.
Hearings on this bill are expected to begin this week, with markups slated for after the July 4 recess. Congressional leaders have stated that they intend to vote on this bill before the August recess, although increasing divisiveness over healthcare reform will likely render this timeline questionable at best.