Phase 1: Enactment & build · Step 1.11

Rewrite insurance & benefits law

Effective in stages with each enrollment wave · Congress; DOL EBSA; Treasury; state insurance commissionersDiscuss this step

Every existing law, program, institution, or practice this step changes: what it is today, what happens to it, when, and what that costs or trades off.

What	Today	Change	Trade-off
COBRA continuation coverage endsYear 4 Federal insurance & health law	Lets people keep employer coverage after job loss at up to 102% of premium.	Repealed for health coverage once everyone is eligible.	No longer needed: coverage no longer depends on a job.
IRC §106 exclusion of employer health coverage endsBy wave Federal tax code	Employer premiums are excluded from income and payroll tax: the largest federal tax expenditure (~$400B/yr incl. payroll).	Ends for UHP-covered services; retained (capped) for supplementary dental, vision, and LTC coverage. Federal income tax on former premium dollars (new) $0.0B → $95.3B	Removes a regressive subsidy worth more to high earners; workers see higher taxable wages instead of tax-free benefits.
IRC §125 cafeteria plans & Flexible Spending Accounts amendedBy wave Federal tax code	Pre-tax premium payments and FSAs for out-of-pocket costs.	Pre-tax premium conversion ends; health FSAs limited to non-covered items.	Simpler; benefits administrators lose FSA business.
Health Savings Accounts (IRC §223) and high-deductible plans endsBy wave Federal tax code	About 38M accounts; triple tax advantage; requires a high-deductible plan.	New contributions end when the owner's wave enrolls (no HDHP exists); existing balances may be used for non-covered care or rolled into retirement accounts without penalty.	Ends a tax shelter mostly used by higher earners; savers lose a tax-advantaged account.
HRAs, ICHRA & QSEHRA endsYear 4 Federal tax code	Employer accounts to reimburse individual premiums and costs.	End for UHP-covered care.	No longer needed.
ERISA (employer benefit plans) & its preemption of state law (§514) amendedYear 0 Federal insurance & health law	Self-insured employer plans (about 60% of covered workers) are federally regulated and shielded from state insurance law.	Employer health plans for UHP services end; preemption amended so states can regulate supplementary coverage.	Large multistate employers lose uniform federal treatment of their remaining benefits.
ACA insurance market rules (guaranteed issue, community rating, essential health benefits, MLR) amendedYear 4 Federal insurance & health law	Govern the individual and small-group markets.	Moot for core coverage; adapted to regulate supplementary coverage (85% minimum MLR).	None for patients; insurers face strict rules on a much smaller market.
Ban on duplicative private insurance (new) newBy wave Federal insurance & health law	—	Insurance covering UHP benefits may not be sold to UHP-eligible people (100% excise tax on premiums), for at least 10 years.	Keeps one queue; removes a private fast lane (see access trade-off).
State insurance departments & mandated benefits amendedYear 4 States & localities	Regulate fully insured plans; impose benefit mandates and premium taxes.	Regulate supplementary insurance only; benefit mandates moot; premium tax base shrinks (~$18.0B lost).	States lose revenue and regulatory reach.
Short-term limited-duration plans, fixed indemnity plans & health care sharing ministries endsYear 4 Federal insurance & health law	Cheaper, underwritten coverage outside ACA rules; sharing ministries are not insurance.	Banned as duplicative coverage for UHP-covered services; indemnity products allowed only as supplementary income protection.	Removes products that left people underinsured; members of sharing ministries lose a faith-based arrangement they chose.