The Affordable Care Act doesn't always easily translate to foreign markets, so the House voted 268-150 Tuesday to exempt health plans provided to expatriates who live abroad for more than six months from key requirements of the law.
But opponents of the bill fear this would create a loophole that could leave millions of immigrant workers without the protections of the ACA.
According to Democratic Rep. John Carney, a cosponsor of the bill, Congress decided to revise the health law because lawmakers never intended for the ACA's requirements to apply to such plans. If the Senate approves the bill, these plans would not be required to cover such essential health benefits as emergency services or such preventive care as vaccinations or cancer screenings.
However, the expatriate plans must still meet the minimum value requirements of the health law, meaning that they must cover at least 60 percent of the costs associated with the plan benefits. The plans would also have to comply with existing laws passed prior to the Affordable Care Act, such as the Employee Retirement Income Security Act, which offers patient privacy protections and safeguards for retirement plans.
Insurance companies offering expatriate coverage would be exempt from the taxes and fees put in place by the Affordable Care Act for those plans. This provision, the bill's supporters say, ensures that U.S.-based insurance companies remain competitive in the global market, where foreign companies do not have such fees associated with offering coverage.
Because of that exemption, the bill would result in losses of $1.4 billion over 10 years, according to estimates from the Congressional Budget Office and the Joint Committee on Taxation.
Without the proposed changes, the bill's sponsors say, insurance companies would offshore the operation of those expatriate plans to avoid the health law's financial limitations. Such a move could mean a loss of 1,200 domestic jobs, 500 of which are in Carney's home state of Delaware. Carney cosponsored the bill with California Republican Devin Nunes.
Impending insurance-facility closures are in large part what's driving the push to get the bill approved.
While there is widespread agreement that the bill remedies a problem for U.S. citizens living and working abroad, a number of Democrats—led by Rep. Henry Waxman of California—argue that it creates a loophole that could deny the protections of the Affordable Care Act to as many as 13 million immigrant workers classified as legal permanent residents of the United States. That's because companies would have an incentive to switch immigrant workers to expatriate plans that do not offer the full benefits required by the Affordable Care Act.
The bill's bipartisan group of supporters say that was never their intent—nor do they believe that will happen. They say expatriate plans are inherently more expensive to administer because of requirements to maintain provider networks in multiple countries and to reimburse in multiple currencies. They argue that any benefit-cutting that companies may try would be outweighed by the basic administrative cost of offering an expatriate plan.
The Joint Committee on Taxation anticipates some benefit-cutting from the draft law, but also some incentive for employers to add coverage where they would not.
"We anticipate that this bill would cause some employers who would offer ACA-compliant plans under present law to offer less generous expatriate plans, and would lead other employers who offered no coverage under present law to offer expatriate plans, thus resulting in offsetting effects on exchange subsidies and overall coverage," said JCT Chief of Staff Thomas Barthold in an email to Congress.
How the Senate will handle the bill remains to be seen. But the White House has issued a statement that it does not approve of the Expatriate Health Coverage Clarification Act in its current form, and would like to see negotiations reopened on the bill.
This article appears in the April 30, 2014 edition of NJ Daily.