Health Care Fairness for All Act
Health Care Fairness for All Act would fundamentally reshape federal health policy by removing the ACA-era mandates and giving states more control, while introducing a universal health insurance tax credit system and major changes to health savings accounts (HSAs). The bill repeals the individual mandate and the employer mandate, but keeps certain consumer protections in place and allows states to offer alternative, more flexible coverage options. Central to the approach is a new health insurance tax credit (36C) designed to reduce the cost of coverage, coupled with a reimagined HSA framework (including Roth HSAs) and a path for states to implement a market-based, lower-mandate system. The measure also includes reforms to Medicare and Medicaid in various areas, and adds price transparency requirements for hospitals. In practical terms, the bill shifts among: (1) federal mandates to state flexibility; (2) a new, credit-based subsidy system tied to creditable coverage and HSAs; (3) a significant overhaul of how HSAs are treated (transitioning to non-deductible HSA contributions and eliminating the medical expense deduction); and (4) continued but restructured consumer protections and information transparency. It also contemplates new default enrollment options in some states and gives states leeway to regulate outside exchanges, while limiting certain required benefits.
Key Points
- 1Repeal of ACA mandates and related reporting
- 2- Repeals the individual health insurance mandate and the employer mandate, along with related reporting requirements. Effective dates push these changes to plan years beginning after enactment (with specific timing outlined).
- 3- Clarifies that employers can reimburse employees for premiums for individual coverage without creating a group health plan for certain regulatory purposes.
- 4State flexibility and default enrollment options
- 5- Gives states authority to shape health coverage outside the ACA exchanges, including enrollment timing, premium variations by age, and other adjustments to ensure an orderly market.
- 6- Allows a state to implement a default enrollment option for uninsured residents, funded via a Roth HSA unless the resident opts out. The default plan would be a high-deductible insurance product with certain features and a Roth HSA component.
- 7Health Insurance Tax Benefit (new 36C credit) and coordination with employer subsidies
- 8- Creates a new nonrefundable (with advance payment options) health insurance tax credit (section 36C) for qualified residents, calculated monthly based on a base amount plus child-related amounts. Credits are tied to creditable coverage and are limited by actual premium payments and HSA contributions.
- 9- The credit is coordinated with any employer-provided health insurance subsidies; if the employer subsidy exceeds the credit, the excess is treated as taxable income.
- 10- Includes an advance payment program to provide early credit amounts directly to HSAs or to issuers/plan administrators, with reconciliation at year’s end.
- 11Health Savings Accounts reform
- 12- Title II introduces a transition to non-deductible HSAs and eliminates the medical expense deduction, altering the tax incentives around medical costs.
- 13- Defines a Roth HSA and integrates it into the default enrollment option and credit structure.
- 14- Addresses transfer of records when changing plans and applies risk adjustment mechanisms across the individual market.
- 15Basic health insurance and limited benefit insurance; risk adjustment
- 16- Establishes a concept of “basic health insurance” that must be offered in Exchanges and areas served, with limited benefit insurance defined and allowed under certain conditions.
- 17- Imposes risk adjustment among individual-market plans to balance premiums and costs across issuers, with a multi-year transition plan and a longer-term goal for a uniform risk-adjustment framework.
- 18Consumer protections and private market flexibility
- 19- Maintains several core consumer protections from the pre-ACA framework (e.g., guaranteed issue, renewability, no preexisting condition exclusions, etc.), but under a framework that relies more on state flexibility and the new credit/HSA structure.
- 20- Removes the essential health benefits (EHB) requirement at the federal level, while permitting states to choose whether to apply or modify such requirements.
- 21Medicare, Medicaid, and price transparency
- 22- Includes Medicare-related reforms (e.g., site-neutral payments, physician-owned hospital considerations) and expands home-based acute care waivers.
- 23- Adds price transparency provisions aimed at making hospital pricing more accessible to consumers.