Congress and healthcare exchange exemptions
Whether Congress is trying to exempt itself from Obamacare has become a huge topic again. This has been a hot topic and polarized both sides of the aisle. I’ve seen both sides give inaccurate or misleading information on the topic. Here is my current understanding of the topic based upon reading the actual law. For referee here is a PDF of the Patient Protection and Affordable Care Act (aka ACA, PPACA, Obamacare).
One of the many amendments added to ACA was one provided by Sen Grassley of Iowa to force Congress and their staff on to Obamacare. I don’t think the amendment was ever expected (or wanted) to be passed. It was a political move Grassley had taken to force the Democrats into voting against an amendment that would show they were too good to enroll themselves on the healthcare exchanges. This political move by Grassley become one of many fights for the passing of Obamacare. The amendment did eventually pass, however it was stripped down from its original version. The original version would have included all federal employees. The final passed version was added to section 1312 of ACA as section D. Here is the text of 1312(d)(3)(D):
(D) MEMBERS OF CONGRESS IN THE EXCHANGE.—
(i) REQUIREMENT.—Notwithstanding any other provision of law, after the effective date of this subtitle, the only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are—
(I) created under this Act (or an amendment made by this Act); or
(II) offered through an Exchange established under this Act (or an amendment made by this Act).
(ii) DEFINITIONS.—In this section:
(I) MEMBER OF CONGRESS.—The term ‘‘Member of Congress’’ means any member of the House of Representatives or the Senate.
(II) CONGRESSIONAL STAFF.—The term ‘‘congressional staff’’ means all full-time and parttime employees employed by the official office of a Member of Congress, whether in Washington, DC or outside of Washington, DC.
Secion 1312(d)(3)(D) requires all members of Congress and their staff to be enrolled on the healthcare exchanges. This is not exactly the part of the law being contested by Democrats. What is being contested is whether Congress and their staff should get employer contributions for the insurance on the healthcare exchanges. To determine this more research must be done.
Here is section 1304(b)(1) which defines “large employer”.
(b) EMPLOYERS.—In this title:
(1) LARGE EMPLOYER.—The term ‘‘large employer’’ means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 101 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year.
By this definition the US Congress definitely counts as a “large employer”. As a large employer Congress would utilize the Large and Small Group Markets portion of the exchange. This is per section 1304(a)(3):
(3) LARGE AND SMALL GROUP MARKETS.—The terms ‘‘large group market’’ and ‘‘small group market’’ mean the health insurance market under which individuals obtain health insurance coverage (directly or through any arrangement) on behalf of themselves (and their dependents) through a group health plan maintained by a large employer (as defined in subsection (b)(1)) or by a small employer (as defined in subsection (b)(2)), respectively.
Section 1312 (f)(2) states when large employers may begin utilizing the exchanges.
(2) QUALIFIED EMPLOYER.—In this title:
(A) IN GENERAL.—The term ‘‘qualified employer’’ means a small employer that elects to make all full-time employees of such employer eligible for 1 or more qualified health plans offered in the small group market through an Exchange that offers qualified health plans.
(B) EXTENSION TO LARGE GROUPS.—
(i) IN GENERAL.—Beginning in 2017, each State may allow issuers of health insurance coverage in the large group market in the State to offer qualified health plans in such market through an Exchange. Nothing in this subparagraph shall be construed as requiring the issuer to offer such plans through an Exchange.
(ii) LARGE EMPLOYERS ELIGIBLE.—If a State under clause (i) allows issuers to offer qualified health plans in the large group market through an Exchange, the term ‘‘qualified employer’’ shall include a large employer that elects to make all full-time employees of such employer eligible for 1 or more qualified health plans offered in the large group market through the Exchange.
It is not until 2017 that large employers will be allowed to offer qualified health plans into the exchanges. That is where the current debate resides and how we have this paradox:
- ACA says Congress and their staff shall use the exchanges for their health plan once the exchanges are open.
- Because Congress has 100 or more employees ACA defines Congress as a “Large Employers”
- ACA says large employers must utilize the “Large Group Market” if they wish to utilize the exchanges.
- ACA states the Large Group Market will not be available until 2017.
Step 1 of this list states Congress and their staff have to use the exchanges when they open; yet Step 4 says they cannot use the exchanges because large employers are not eligible until 2017. So, when members of Congress or Obama are trying to “exempt Congress from Obamacare” they are actually trying to fix this paradox. Currently no matter what Congress does they are technically breaking the law.
The easiest fix is offered by the Republicans. Since employers cannot use the exchange as a qualified health plan until 2017, it would then mean the government cannot provide an employer contribution for them to be on the exchange. Therefore, the Republican side says, no fix is needed other than to stop subsidizing employees health plans. Republicans in the House and Senate have said Democrats should be OK with this fix. Since the health plans on the exchanges will be “cheap” it should be no problem for Congress to take this route. Of course they know this route will not be cheap, but it does make a valuable political statement when Democrats oppose this route.
Democrats have focused upon other potential fixes. One possible fix would be to provide an exemption to Congress that would allow them to subsidize their health insurance now (instead of waiting until 2017). By exempting them from the 2017 provision Congress and their staff could utilize the exchanges now with their employer contribution remaining intact. This is not the only method being mentioned to exempt Congress, but it is the most logical. (I have not yet looked at the method used by Obama to exempt Congress, that will be another post).
Personally I think the Republican option should be used. I do feel bad for Congressional staff that will be negatively impacted by their sudden large increase in health insurance. However it is the only path to let Democrats in DC feel the same pain caused by Obamacare that millions of Americans will also feel. So, if the Democrat “fix” is used then Congress technically IS trying to exempt itself from a part of Obamacare.