While employers -- and the roughly 170 million Americans who have health insurance through the group market -- can breathe a collective sigh of relief, Fenton cautions that the two Republican bills, which, together, are called the American Health Care Act, are almost certainly subject to change.

That includes the possibility that the House may reintroduce the idea of taxing a portion of the group market to pay for the bills’ new tax credits that subsidize individual market coverage.

“Proponents of protecting the tax treatment of employer-provided plans need to stay vigilant,” says Fenton. “Just because the cap on tax exclusions is gone for now doesn’t mean it won’t reappear. There’s a lot of potential revenue in the group market, and if lawmakers need to raise revenue to pay for repeal, that’s the place to go.”

How much potential revenue? Tax-favored employer-provided plans will amount to $4 trillion in lost revenue to the IRS over the next decade, according to some estimates. In 2017, tax exclusions in the group market cost $260 billion in lost income and payroll tax revenue, accounting for the largest expenditure in the tax code, according to the Tax Policy Center.

How to pay for repeal of ACA

In the effort to move the ACA to a House floor vote before the Easter recess, the House Ways and Means Committee, which has jurisdiction over taxes, and the House Energy and Commerce Committee, which oversees health care policy, moved to mark up the bills before the nonpartisan Congressional Budget Office could score them.

This is a highly unusual move, says Fenton.

“It’s not the normal way of doing things,” he says. “I don’t recall seeing a mark-up without a score, if it’s ever happened. But Republicans are in a race against time.”

Republicans plan to repeal and replace the ACA via the budget reconciliation process, which requires a simple Senate majority vote to pass legislation.

But the rules of reconciliation also insist that legislation can’t increase the deficit beyond a 10-year budget window, explains Fenton.

That requirement creates a significant obstacle for Republicans.

The American Health Care Act does away with most of the ACA’s revenue-generating provisions. Early estimates from Joint Committee on Taxation (JCT), another nonpartisan Congressional agency, say the bill would erase $600 billion in tax revenue by 2026.

The bill repeals the employer and individual mandates and their associated taxes along with ACA taxes on higher earners and taxes on health insurers, prescription drug makers and medical device manufacturers.

It also nearly doubles the tax-preferred contributions to health savings accounts, which the JCT says will cost $19 billion in revenue over the next 10 years.

Beyond rolling back the ACA’s revenue generating provisions, the Republican bill creates new costs in the form of tax credits. Low and middle-income individuals and families without group insurance will be eligible for credits ranging from $2,000 to $14,000 a year.

“A lot of what the bill aims to do will be very expensive,” notes Fenton.

Some new costs would be offset by rolling back the Medicaid expansion plotted by the ACA. But it’s unclear whether those savings will be enough to fill all the revenue gaps, says Fenton.

Cadillac Tax stays, implementation further delayed

In an unexpected move, the Republican plan keeps the Cadillac Tax in place -- but extends the scheduled 2020 implementation date to 2025.

They likely maintained the tax to offset the bill’s new costs and lost revenue, says Fenton.

“It’s surprising they kept it on the books, but that’s not to say it will be there indefinitely,” he says.

When the ACA was passed, employers were given eight years to prepare for the Cadillac Tax’s implementation.

In delaying, employers now have another eight year “runway” before they must adjust plans to account for the tax threshold. Fenton says that buys employers plenty of time.

“When the ACA was passed, employers were mindful of the Cadillac Tax, but the Obama Administration never got around to issuing solid guidance beyond delaying it,” he says. “So employers mostly stayed the course with their plans.

“We think that will be the same now,” he adds. “We’re not expecting employers to drastically change plans as a result of the new proposed legislation.”

How the bill could impact coverage in employer market

Under the Republicans’ plan, insurance companies would be unable to cap annual and lifetime coverage limits – both core provisions of the ACA.

The bill also leaves the ACA’s Essential Health Benefits (EHBs) coverage requirements intact. This includes 10 service categories for individual and small-group plans. Large-group plans were not required to offer EHBs, as they typically included those services before the ACA anyway.

Some analysts have described the first version of the American Health Care Act as the opening salvo of a broader negotiation. And when the CBO’s score does arrive, Fenton says, it will change the debate’s whole dynamic of the debate.

Within hours of the bill’s release, conservative House and Senate Republicans pushed back against the proposed new tax subsidies.

And moderate Republicans from states that have already accepted ACA funds to expand Medicaid rolls can be expected to rail against proposed cuts to the welfare program.

“Republicans are walking a tight rope,” says Fenton. “It’s almost a guarantee that we’ll see substantial changes to the legislation.”