Is it a sign of loosening partisan logjam or is Congress just settling for the “lowest common denominator?”

By Kevin Serafino

Since the Affordable Care Act was signed into law in 2010, business groups have sought to make changes to the law that would make it easier to implement the myriad requirements imposed by its employer mandate. While some regulatory proposals have gained traction as the U.S. Departments of the Treasury and Health and Human Services implement the law, most legislative proposals to ease burdens on business owners have failed in the midst of toxic debates over whether the controversial law should be repealed in its entirety.

In Washington, D.C. years, it seems as though a lifetime has passed since 2010, with a presidential election, two congressional midterm elections, and two separate legal challenges to the Affordable Care Act heard by the U.S. Supreme Court in the intervening years. 

All of these factors make this fall’s events all the more surprising. On Oct. 7, with minimal fanfare, President Obama signed into law legislation that will prevent the scheduled expansion of the “small group market” that would have included employers with up to 100 employees, an increase from the current cap of 50 employees. The Protecting Affordable Coverage for Employees Act passed the U.S. House of Representatives under suspension of the rules, and passed the Senate by voice vote, both indications that the legislation had earned broad bipartisan support.

The expansion was set to take place in January 2016, meaning that insurance brokers would be presenting new coverage options to clients with 51 to 100 employees beginning this fall. If the definition had expanded, employers between 51 and 100 employees who had previously benefitted from the lower costs and increased options of the large group market would have been forced into the small group market, where plans often have higher premiums and do not offer the same benefits. Many of these employers are offering coverage for the first time under the employer mandate, adding an additional cost increase on top of the law’s other requirements. The PACE Act allows states to choose whether to expand their small group markets up to 100 employees, providing state governments with the option to do what is best for the insurance market in their states.

In late October, President Obama and congressional leaders announced an agreement on a two-year budget deal and an increase in the federal debt ceiling. It was hailed as a pragmatic compromise that pleased neither party, but a necessity to avoid a default and government shutdown. Tucked away in the package was a repeal of a little-known ACA provision requiring businesses with more than 200 full-time employees to automatically enroll their workers in an employer-sponsored health care plan after 90 days, unless the worker affirmatively opts out of the health plan. In effect, employees who had fulfilled their responsibilities under the law’s individual mandate by obtaining coverage elsewhere (for example, through a spouse or parent’s plan, or government program) could be automatically enrolled in an employer plan, costing both employer and employee hundreds of dollars each month for an entire year. The provision also was seen as redundant, since individuals are already required by law to obtain basic coverage while employers of that size are required to offer coverage to employees.

The provision had no effective date in statute, and the U.S. Department of Labor had yet to release regulations implementing it. In addition, repealing the measure saves nearly $8 billion, in large part because it increases taxable income for workers who would otherwise be double-enrolled in health plans.

Although these new developments are encouraging, many of the franchise industry’s legislative priorities in the health care space have yet to be fully addressed by Congress. Legislation to restore the 40-hour work week as full-time under the employer mandate faces obstacles in the Senate after passing the House in January 2015, while a bill to streamline employer reporting requirements still sits in committee.

The recent agreement between the GOP-controlled Congress and the White House provides a small ray of hope for these other initiatives, but it does nothing do erase the history of fierce debate and bitter disagreement over the Affordable Care Act that has only led to gridlock. A driving force behind the budget compromise was the pending resignation of House Speaker John Boehner (R-Ohio); a party leader who was not a lame duck would likely have needed the support of the majority of his party, and the budget package passed with most House Republicans voting against it. However, these small compromises could set the table for further productive discussions on smaller changes that would provide relief for franchise businesses and other small employers.

Kevin Serafino is IFA’s senior manager of government relations and public policy. Find him at fransocial.franchise.org

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