On May 4, 2017, members of the U.S. House of Representatives voted to pass the American Health Care Act (AHCA), after it had been amended several times. The AHCA needed 216 votes to pass in the House. Ultimately, it passed on a party-line vote, with 217 Republicans and no Democrats voting in favor of the legislation.

The AHCA is the proposed legislation that is intended to be the vehicle to repeal and replace the Affordable Care Act (ACA). The AHCA is budget reconciliation legislation, so it cannot fully repeal the ACA. Instead it is limited to addressing ACA provisions that directly relate to budgetary issues—specifically, federal spending and taxation. A full repeal of the ACA must be introduced as a separate bill that would require 60 votes in the Senate to pass.

The AHCA will now move on to be considered by the Senate. It is likely that the Senate will make changes to the proposed legislation before taking a vote. The AHCA would only need a simple majority vote in the Senate to pass.

If it passes both the House and the Senate, the AHCA would then go to President Donald Trump to be signed into law. If the AHCA is not passed by the Senate and signed by President Trump, the Affordable Care Act (ACA) will remain intact in its entirety until new legislation is passed.

Much of the ACA would not be affected by the AHCA. For example, the following key ACA provisions would remain in place:

  • Cost-sharing limits on essential health benefits (EHBs) for non-grandfathered plans (currently $7,150 for self-only coverage and $14,300 for family coverage)
  • Prohibition on lifetime and annual limits for EHBs
  • Requirements to cover pre-existing conditions
  • Coverage for adult children up to age 26
  • Guaranteed availability and renewability of coverage
  • Nondiscrimination rules (on the basis of race, nationality, disability, age or sex)
  • Prohibition on health status underwriting

Age rating restrictions would also continue to apply, with the age ratio limit being revised to 5:1 (instead of 3:1), and states would be allowed to set their own limits.

We will continue to provide updates on healthcare legislation and help you understand how it affects your business and your employees.