I spent much of the past week lobbying against the Graham-Cassidy bill on moral grounds. Yesterday I took time to consider the tax planning impact. Today I am considering the impact this bill, if passed, would have on small business employee benefits practices. I conclude that the impact would be immediate and dramatic. These are the first four that came to mind:
1) Removal of most penalties affecting individuals and small businesses opens the door to fresh creative strategies. This would be a blessing to my Freedom Benefits consulting practice. A range of new health plans would fill the void created by Obamacare mandates.
2) Employers could focus on providing the benefits that employees want most rather than what is required. HRAs, HSAs, FSAs and cafeteria benefit plans would expand.
3) Employees would select less expensive insurance options that they perceive would provide better value. But insurance market conduct problems would increase to pre-ACA levels. The need for reliable information reviews and recommendations would skyrocket.
4) Some people would wind up facing large medical bills without sufficient insurance protection from costs and would benefit from pre-bankruptcy financial planning. Presumably there would be no money to pay for this planning unless it was provided on a group prepaid basis.