February 12, 2021
Drafts of the House COVID relief legislation working their way through various committees include COBRA subsidies for employers and a historic, but temporary, increase in federal subsidies to purchase coverage on the ACA exchanges.
COBRA subsidies for employers through September 30, 2021: The Ways and Means and Education and Labor Committee bills both provide tax credits to employers for 85% of COBRA premium costs. Employers will need to amend their COBRA notices to newly eligible employees to include the availability of the new subsidies and the date of their expiration.
The Ways and Means bill also expands subsidies under the ACA and includes the following:
The Energy and Commerce Committee bill provides funding incentives to states who have not yet expanded their Medicaid programs to do so and would end Medicaid drug rebate caps, which could prompt drug makers to leave the Medicaid program and shift further costs to employers.
Significant COVID testing and vaccine funding is also included in the Energy and Commerce bill, including $46 billion for testing, $14 billion to speed up vaccine distribution and administration, $7 billion to mobilize public health professionals, and $25 billion to address health disparities.
However, the bills fall short of accomplishing all Democratic COVID relief priorities. For example, they do not fulfill Biden's campaign promises of fixing the ACA “family glitch,” tying the ACA benchmark plan to gold plans, funding state initiatives, providing additional outreach and enrollment funding, or adopting a public option.
Outlook: House committees are expected to finish most of their work this week and the House will vote on a final bill before the end of February. The Senate is expected to begin work on its COVID relief reconciliation bills next week. A second reconciliation bill, which will include other health care reforms, is expected later this year.