On Tuesday, March 23, President Obama signed into law the Patient Protection and Affordable Care Act, capping a year of intense and at times partisan debate. In the end, 34 Democrats joined all Republicans in opposing the measure in the House, and all Republicans opposed the measure in the Senate.
Following passage, both chambers of Congress passed a reconciliation package that makes slight changes to the bill, including removal of language that exempts a single industry, construction, from the small business exemption that was included in the law just signed by the president. However, before all the reconciliation changes can be made to the law, it must pass the House one more time, likely today or later this week.
AGC opposed the $1 trillion package from the beginning because of the complexity of the plan, the $500 billion in new taxes on employers and individuals, the new mandates on employers, the cost shifting rather than cost reductions and the likelihood that it will increase insurance costs for those who already have and provide insurance.
The Patient Protection and Affordable Care Act will be phased in over the next eight years and includes an individual requirement to have health insurance, creates new state-based exchanges, requires employers to provide health care benefits, provides cost sharing for low-income individuals and expands Medicaid.
Assuming the reconciliation bill passes, the following changes will affect the construction industry:
- Employers with 50 or fewer employees will be exempt from providing coverage to their employees. The Senate bill had only exempted construction firms with five or fewer employees from the mandate, but AGC worked with other construction trade groups to repeal this provision that targeted the industry. In addition, the penalties for a waiting period of less than 90 days have been removed.
- Some small employers could be eligible for temporary small business tax credits to offset a portion of the cost of providing coverage, but the credit phases out as firm size and average wage increases. The credit will be available for only two years.
- The bill will limit contributions to FSAs and restrict the purchases for over-the-counter products from using FSA funds.
- The bill places a 40 percent excise tax on "Cadillac" health plans beginning in 2018. Under the reconciliation package the tax is placed on plans that have an aggregate value that exceeds $11,850 for individuals and $30,950 for firms in the construction industry.
- In 2014, new state-based exchanges will be created for individuals, and eligible small employers will be phased in.
- The bill also restricts the construction and expansion of existing physician-owned hospitals.