Is Congress Exempt From Obamacare?

Does the ACA Apply to Congress, or Did They Exempt Themselves?

Senator Chuck Grassley (R, Iowa), called for a requirement in the ACA that Congress and staffers obtain coverage in the exchange
Is Congress exempt from the ACA? Far from it, thanks to Iowa Senator Chuck Grassley's (R) amendment. Alex Wong/Getty Images

When it comes to information about the Affordable Care Act, otherwise known as Obamacare, it can sometimes be tough to separate fact from the fiction. The Kaiser Family Foundation recently reported that only about 14 percent of Americans consider social media sites like Facebook and Twitter to be relatively trustworthy sources of information about the ACA.

But information about the ACA is constantly popping up on social media—and sometimes it raises questions that make people wonder.

If you start typing "Is Congress ex..." into Google, the first autofill finishes the question as "exempt from Obamacare?" This is clearly a question that a lot of people have, no doubt in part because of the vast number of memes on this topic that have circulated on social media over the last few years.

Obamacare Actually Applies More Strictly to Congress

First, to clarify, Congress is not exempt from Obamacare.

But let's take a look at how this rumor got started, and the rules—which are actually much more strict than how Obamacare applies to the rest of us—that actually apply to Congress.

Back when the ACA was being debated in Congress in 2009, there were questions about whether lawmakers were foisting the ACA's various reforms—including the health insurance exchanges—on the American public without any impact on their own health insurance.

This was an odd concern, because like most Americans, members of Congress had employer-sponsored health insurance, so they weren't the people for whom the health insurance exchanges were created.

But the ACA generate such a political firestorm that details like that sort of got lost in the noise, and the rumor persisted that Congress was somehow "exempt" from Obamacare.

The Back Story

Obamacare is a law. It applies to virtually all Americans, and is much more far-reaching than just the exchanges.

It provides numerous consumer protections, and includes substantial assistance to make coverage more affordable for low-income and middle-income Americans. But in terms of what the law requires of individual Americans, it's very straightforward: People have to maintain minimum essential coverage, or else face a tax penalty (other requirements apply to employers and health insurance carriers, but the requirement for individuals is just to maintain coverage).

Minimum essential coverage includes employer-sponsored plans, Medicaid, Medicare, the Children's Health Insurance Program (CHIP), and individual market major medical plans, including those purchased through the  exchanges or off-exchange, as well as grandmothered and grandfathered plans. There are other types of coverage that also fit under the minimum essential coverage umbrella—basically, any "real" coverage will work, but things like short-term health insurance, accident supplements, and limited benefit plans are not minimum essential coverage.

Since most non-elderly Americans have coverage through their employers, they didn't have to make any changes as a result of the Affordable Care Act. As long as they have continued to have employer-sponsored health insurance, they have remained in compliance with the law.

That would have been the case for Congress too, since they were covered under the Federal Employee Health Benefits Program (FEHBP), which provides health coverage to federal workers.

But in 2009, Senator Chuck Grassley (R, Iowa) called for an amendment to the legislation as it was being debated, in an effort to ensure that Congress would "need to go into the exchange so that we would have to go through the same red tape as every other citizen."

Remember, the vast majority of Americans do not have to shop in the exchanges. The exchanges were specifically designed to serve people who buy their own health insurance because they don't have access to an employer plan, as well as those who were uninsured altogether.

People with employer-sponsored coverage (which included Congress back when the Affordable Care Act was being drafted) do not have to deal with the exchanges at all, and there's no additional "red tape" for them under the ACA, other than checking a box on their tax returns stating that they had health insurance coverage throughout the year (if you work for a small business, your employer might purchase coverage through the small business (SHOP) exchange, in which case, you might be directed to the exchange to select your plan. But your employer is purchasing the coverage in that case, and funding a portion of your premium).

The Grassley Amendment

But Grassley's amendment made it into the law. Section 1312 (d)(3)(D) of the Affordable Care Act says:

(D) MEMBERS OF CONGRESS IN THE EXCHANGE.—(i) REQUIREMENT.—Notwithstanding any other provision of law, after the effective date of this subtitle, the only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are

(I) created under this Act (or an amendment made by this Act); or

(II) offered through an Exchange established under this Act (or an amendment made by this Act). 

As a result, Congress and congressional staff have been purchasing coverage through DC Health Link's SHOP exchange since 2014. DC Health Link is the health insurance exchange for the District of Columbia.

SHOP exchanges were designed for small employers to use, but D.C.'s exchange is open to members of Congress and their staff, in order to comply with the ACA's requirement that they obtain coverage via the exchange. Members of Congress and congressional staffers account for the bulk of D.C. Health Link's SHOP enrollments

What About Subsidies?

The ACA provides subsidies (tax credits) to offset the cost of premiums for people who shop for individual market coverage in the exchanges. But in the SHOP exchanges, employers provide subsidies, in the form of employer contributions to the total premium.

Where things got messy was the fact that Congress members were previously benefitting from about $5,000 in employer (ie, the government) contributions to their FEHBP coverage if they were enrolled on their own, and about $10,000 if they were enrolled in family coverage. Note that this is perfectly legitimate, and very much on par with the health insurance premium contributions that the average employer makes on behalf of employees.

Switching to the individual market exchange would eliminate access to employer contributions, as the ACA forbids employers from paying for individual market coverage for their employees. But it would also mean that most of those folks—including all members of Congress and many of their staff—would have lost access to subsidies altogether, since subsidies in the exchange are based on income, and Congressional incomes are far too high to be eligible for subsidies unless the family is very large.

A Compromise: Keep Employer Contributions, But Enroll via Exchange

So the Office of Personnel Management (OPM), which runs the FEHBP, stepped in. They ruled in 2013 that Congress and Congressional staff would be able to enroll in D.C. Health Link's SHOP exchange and would still be able to keep their employer contributions to their coverage.

This move was obviously controversial, with some people saying that Congress and their staffers should indeed have had to give up their FEHBP employer contributions and enroll in the individual market exchange, with subsidies only available if they were eligible based on income. It should be noted, however, that Grassley himself said in 2013 that the original intent of the amendment was to allow Congress and staffers to keep the employer contributions that were being made to their health insurance premiums, despite a requirement that they enroll through the exchanges. Grassley contended that the amendment was poorly written after the details were sent to Senate Majority Leader, Harry Reid (D, Nevada).

Because of the OPM's ruling, Congress and their staffers still have an employer contribution to their health insurance premiums, but they obtain their coverage through the D.C. Health Link SHOP exchange. This is a compromise that attempts to fulfill the requirements of the ACA, but without disadvantaging Congress and their staffers in terms of employee benefits relative to other similarly-situated jobs.

The current situation came about as a result of language in the ACA itself that specifically referred to the health benefits of Congress and their staff. Without that language, there would have been no question—Congress would never have had to shop in the exchange, because they had employer-sponsored coverage. That would not have meant that they were "exempt" from Obamacare. They still would have had to maintain health insurance coverage or face a penalty, just like every other American.

The exchanges were established for people who did not have employer-sponsored coverage (and for small businesses wishing to purchase coverage for their employees). But because of the Grassley Amendment in the ACA, Congress had to transition from their employer-sponsored health benefits in the FEHBP, and switch instead to D.C. Health Link's SHOP exchange. This is a requirement that was not placed on any other sector of employees under the ACA, including other government employees who use the FEHBP.

So not only is Congress not exempt from the ACA, the law actually went out of its way to include them in a segment of the population (ie, those for whom the exchanges were designed) in which they would not otherwise be included.

Sources:

Healthcare.gov. Read the Affordable Care Act.

Kaiser Family Foundation, Employer Health Benefits, 2016 Summary of Findings.

Kaiser Family Foundation, Health Insurance Coverage of the Total Population. 2015.

Kaiser Family Foundation, Kaiser Health Tracking Poll, October 2016.

Office of Personnel Management. Frequently Asked Questions: Insurance.

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