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GOP plan would eliminate ACA employer mandate, revamp Cadillac tax

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The employer mandate would be eliminated and the health care reform law's Cadillac tax on costly plans would be eased under a sweeping proposal that House Republican leaders unveiled Wednesday.

The new package, which congressional staffers said during a Tuesday briefing would lay the groundwork for legislative action next year, would repeal the 2010 Affordable Care Act, though certain provisions would be modified and retained.

“Obamacare has limited choices for patients, driven up costs for consumers and buried employers and health care providers under thousands of new regulations,” according to the proposal, A Better Way: Our Vision for a Confident America. “House Republicans know there is a better way.”

For employers, one of the biggest changes would be eliminating the ACA's employer mandate. Under current law, employers with at least 50 full-time employees must pay a $2,160 penalty for each full-time employee if they do not offer health insurance.

That mandate is at least partly responsible for the rise in the number of U.S. residents working part-time, or less than the 30 hours considered to be full-time under ACA, according to the report directed by Speaker of the House Paul Ryan, R-Wis.

“More than 6.4 million Americans now are working part-time because they cannot find full-time work. That is over 2 million more than the amount seen before the recession. And there is reason to believe Obamacare has stalled progress in reducing that figure,” according to the GOP plan.

The GOP package would change an ACA provision that would dramatically affect employers: the 40% excise tax on that portion of health plan premiums that exceed $10,200 for single coverage and $27,500 for family coverage that is to go into effect in 2020.

The Republican proposal would exclude contributions to health savings accounts in determining whether plan costs would trigger the excise tax, saying it “is good policy to encourage use of HSAs.”

In addition, the cap would be adjusted based on geographic cost variations “so someone is not unfairly penalized if he lives in a place where health care costs are higher,” according to the proposal.

Rather than federal premium subsidies to help the lower-income uninsured offset the cost of health insurance purchased through public exchanges, Republicans would use tax credits to allow eligible individuals to buy coverage directly from insurers. They also could buy health coverage from insurers licensed outside their states.

The GOP plan, which the report says would bend health care costs down, would allow small employers to band together to purchase health insurance.

Small employers should be able to “offer health care coverage at lower prices through improved bargaining power at the negotiating table with insurers just as corporations and labor unions do,” according to the GOP proposal.