First off, there’s a new acronym. Once ACA, then AHCA, it’s now BCRA – Better Care Reconciliation Act.
BCRA and Payroll
As far as payroll is concerned, the BCRA would eliminate the employer and individual mandates. Effective for months beginning after December 31, 2015, there would be no penalties for employers who do not offer ACA-compliant insurance and individuals who do not maintain health care coverage. BCRA would also repeal the additional 0.9% Medicare tax withholding on wages in excess of $200,000, effective in 2023.
ACA excluded over-the-counter medications as qualified expenses reimbursable through an HSA, MSA, FSA or HRA, but that qualified OC medical expense limitation would be repealed by BCRA retroactive to 2017. BCRA would eliminate limits to FSA contributions and also increase HSA contribution limits.
BCRA would reduce penalties for nonqualified medical HSA and MSA expense distributions, lowering additional tax rates from 20% to 10%-15% on nonqualified expenses. The Cadillac Tax would be delayed until 2026 by BCRA.
One thing that BCRA does not specifically address is what information employers would be required to report, or where they would report it. Currently ACA information is reported on Form 1095-C, but there had been discussion of AHCA information being reported on Form W2.
Death and taxes and healthcare reform...these things remain constant. At least in the foreseeable future.