With the 2016 employer mandate tax assessment letters hitting employer desks this week, it seems like a good time to summarize our experience with the 2015 ESRP process.  We can’t identify clients or disclose specifics of any 2015 Employer Shared Responsibility Payment matter that we have handled; this is just our overall view.

  • The IRS occasionally got something wrong, but employers usually got 2015 Letter 226J because the employers or their AIR Transmitters reported something incorrectly or incompletely on 2015 Form 1094-C and/or 2015 Form 1095-C.  Lots of HR and payroll people did the best they could with few resources and little time to get it right.
  • Maybe because the IRS understands that, or because the IRS also is under-resourced and time-crunched, employers were granted reasonable extensions to submit their 2015 ESRP Responses.  We’re aware of only one instance in which IRS denied a request for an extension of the 30-day deadline.
  • Employers have been getting IRS replies to their ESRP responses about two months after submission.  Reasonable explanations of their reporting errors, submitted with corroborating evidence and appropriate corrections, have been accepted.

Here’s what we don’t know.

  • To what extent will IRS assess reporting penalties for Form 1095-C corrections first made in 2015 ESRP responses?
  • Will the 2016 process be automated (as previously announced) or will it be, like 2015, a manual, paper process?  The 2016 Letter 226J looks to us just like the 2015 Letter 226J.  So, for 2016, as for 2015, correcting Form 1095-C mistakes to avoid an improper ESRP assessment will be simple but correcting Form 1094-C mistakes probably won’t be.


If you were among those under-resourced, time-crunched HR and payroll people who made 2015 reporting errors, you should be troubleshooting 2016 filings now.

It sure seems like a long, long time since ACA foes were suing to block executive actions to “fix” problems that Congress couldn’t or wouldn’t.  Now, it’s the turn of ACA defenders, who are suing to block executive actions to “fix” ACA problems that Congress failed to solve by passing any of the “repeal” bills.

In New York Et Al. v. Acosta, D. D.C. No. 1:18-cv-1747, filed July 26, 2018, eleven states and the District of Columbia contend that the DOL Association Health Plan final rule impermissibly undercuts the ACA by unreasonably re-interpreting ERISA.  The case is assigned to Senior District Judge John D. Bates, an Army veteran who served as Deputy Independent Counsel for the Whitewater Investigation before being appointed to the Court in 2001 by President Bush.

Based on similarly accusatory comments received in opposition to the Final Rule on Short Term, Limited Duration Insurance, we expect its official publication on August 3, 2018 to provoke an attempt to block it before it takes effect in early October.

Of course, executive actions, and countering litigation, have unintended, unforeseen consequences.  One consequence of blocking the STLD Final Rule might be to boost the prospects for Association Health Plans, if that Rule isn’t also blocked.  If both Rules took effect, we would expect the STLD rule to reduce the demand for  Association Health Plans, since both types of coverage would target small business owners who aren’t eligible for ACA Exchange subsidies and whose existing options are limited and expensive.  If the STLD Rule is blocked but the AHP Rule isn’t, some undecided associations and issuers may decide to enter the AHP business.

There’s a comically profound scene in the second “Madagascar” movie.  Penguin (management) and monkey (union) committees are negotiating a labor contract.  After the monkeys seem to have secured what they want, they add a demand: maternity leave.  The chief penguin looks under the table, then shouts at his counterpart: “Maternity leave?  You’re all male!”

An employer reading IRS Letter 226J and accompanying Form 14765 (recently mailed to notify employers of proposed 2015 employer mandate tax assessments) may realize that a group health plan change is needed to reduce or eliminate an employer mandate tax exposure not previously recognized.  The change may be so obviously beneficial to union-represented employees that the employer can’t imagine collateral demands being made as a price of union agreement.  Imagine it.  Plan on it.

Before making any material change to a group health plan, or to plan administration affecting union-represented employees, an employer covered by the National Labor Relations Act must give the union notice and an opportunity to bargain about the proposed change.  That duty and opportunity is subject to some exceptions.  Two are frequent troublemakers.  An employer may think that a union has waived that right and given the employer liberty to make changes, but the National Labor Relations Board recognizes only waivers that are “clear and unmistakable,”  such as specific, express terms of a current, written labor contract.  And if the current contract lacks such a waiver, but includes a “zipper clause,” the union may have the right to postpone bargaining until the next contract opening, perhaps years in the future.  If you want immediate discussions, there may be a price for the union’s waiver of the zipper clause.

If an employer makes material group health plan changes without respecting these and other applicable NLRB rules, the Board’s regional office may commence administrative litigation leading to a range of costly remedies.  For example, the NLRB might require the employer to restore the prior plan terms and/or bear uninsured costs that were covered before the employer made the unlawful changes. You may have insurance for other employment claims, but unless you know that it covers NLRB matters, assume that it doesn’t, and add 100% of your defense expenses to the price you might pay for this mistake.  Such litigation can take years and run up huge expenses even if no employee suffered any actual harm from the NLRA violation.

What the penguin said.

Entering a football stadium many years ago, your nimble correspondent encountered unarmed security contractors wearing uniforms featuring the company logo – a big, red bull’s-eye – on the front of the baseball cap and on the left breast pocket of the shirt.  Similarly, IRS Form 14765 may invite some employers to target themselves for IRS information reporting penalties.  Here’s how.

Starting in November 2017, IRS mailed Form 14765, “Employee Premium Tax Credit Listing,” along with Letter 226J and Form 14764 to notify employers of proposed employer mandate tax assessments for 2015.  Letter 226J notifies an Applicable Large Employer (or Member) that the IRS intends to assess 2015 employer mandate taxes in stated amount, unless the employer responds by submitting with Form 14764 (hyperlink currently disabled) its valid objections.  The employer typically must deliver this within thirty days of the mailing date shown on Letter 226J.  Such taxes may be assessed under Code § 4980H only for months in which at least one ALE Member full-time employee received an ACA subsidy for insurance coverage purchased through an ACA exchange – Healthcare.gov, for example.  Form 14765 lists those tax-triggering employees, along with relevant information that the employer reported about them when it filed its 2015 Forms 1095-C.    The employer might conclude that Letter 226J was provoked by its erroneous reporting.  For example, a “smaller large employer” of 50 to 100 FTEs may have failed to claim available 2015 transition relief.  Form 14765 invites the recipient of Letter 226J to claim that relief by entering the correct codes in rows underneath the reported information shown.

However, Letter 226J also instructs such a recipient: “Do not file corrected Forms 1095-C with the IRS to report requested changes to the Employee PTC Listing ….”  Standing alone, that can be understood in at least two materially different ways: (1) the information reporting penalty and ESRP assessment processes are independent, so filing corrected Forms 1095-C might help you avoid information reporting penalties but it won’t help you in the ESRP process; or (2) the IRS wants to have to analyze only one set of proposed corrections, so please don’t file a duplicate set; say what you want solely on Form 14765.

In many, perhaps most situations, confessing material reporting errors on Form 14765 may be an excellent idea, but there is some ciphering to be done first.  Did the erroneous reporting expose the employer to penalties under Code § § 6721 and 6722?  Those penalties may reach $500 per errant Form 1095-C and, though IRS announced a broad range of planned lenience for good faith mistakes in 2015 information reporting, it warned that known errors left uncorrected could lead to penalty assessments.  So, what did you know about these errors and when did you know it?  More to the point, how much § 4980H tax might you avoid by admitting to how much penalty exposure? And will the IRS recognize the 2015 reporting errors and impose penalties even if you don’t confess?

This is just one collateral exposure that could be created depending on what actions an employer takes based on receipt of Letter 226J. If you goofed 2015 information reporting because you failed to get well-informed advice, don’t repeat that error and put a target on your forehead.

On November 17, the IRS published the Form that Applicable Large Employers must use to respond to IRS letters regarding proposed assessment of 2015 employer mandate taxes.  Form 14764 is a paper, mail-in “ESRP Response” that shows the receipt deadline at the top of the Form, along with a number to call to request an extension of that deadline.  On page 1, the ALE’s authorized official either accepts IRS collection of the proposed assessment or disagrees (either partly or totally).  On page 2, the ALE’s authorized representative may designate another person to provide further information to the IRS regarding the proposed assessment, but may not authorize full representation.  That must be done separately.  See Form 2848 and its Instructions.  There is no space for the ALE to indicate the grounds for its disagreement, nor is there any instruction about the format of or due date for such a submission.  Indeed, whether it may be submitted separately is not stated.

However, your IRS notice letter (Letter 226J) should include this set of instructions:

If you disagree with the proposed ESRP

• Complete, sign, and date the enclosed Form 14764, ESRP Response, and send it to us so we receive it by the Response date on the first page of this letter.

• Include a signed statement explaining why you disagree with part or all of the proposed ESRP. You may include documentation supporting your statement.

• Make sure your statement describes changes, if any, you want to make to the information reported on your Form(s) 1094-C or Forms 1095-C. Do not file a corrected Form 1094-C with the IRS to report any changes you want to make to your Form 1094-C filed for the tax year shown on the first page of this letter.

• Make changes, if any, on the Employee PTC Listing using the indicator codes in the Instructions for Forms 1094-C and 1095-C for the tax year shown on the first page of this letter. Do not file corrected Forms 1095-C with the IRS to report requested changes to the Employee PTC Listing; and

• Include your revised Employee PTC Listing, if necessary, and any additional documentation supporting your changes with your Form 14764, ESRP Response, and signed statement.

About the Form 14765, Employee PTC Listing

The Employee PTC Listing shows the name and truncated social security number of each full-time employee for whom you filed a Form 1095-C if:

• The employee was allowed a PTC on his or her individual income tax return for one or more months of the tax year shown on the first page of this letter; and

• You did not report an affordability safe harbor or other relief from the ESRP on the employee’s Form 1095-C for one or more of the months the employee was allowed a PTC.

These employees are referred to as assessable full-time employees.

Each monthly box on the Employee PTC Listing has two rows. The first row reflects the codes, if any, that were entered on line 14 and line 16 of the employee’s Form 1095-C for each month. For each employee, if the month is not highlighted, the employee is an assessable full-time employee for that month.

If the month is highlighted, the employee is not an assessable full-time employee for that month.

Employees who are not considered assessable full-time employees for all twelve months of the year (either because the employee was not allowed a PTC for any month in the calendar year or a safe harbor or other provision providing relief was reported on Form 1095-C for each month the employee was allowed a PTC) are not included on the Employee PTC Listing.

Specific instructions for making changes to the Employee PTC Listing

• If the information reported on an assessable full-time employee’s Form 1095-C was inaccurate or incomplete, you may make changes to the Employee PTC Listing using the applicable indicator codes for lines 14 and 16 that are described in the Instructions for Forms 1094-C and 1095-C. Make any changes, for each employee, as necessary, by entering new codes on the 2nd row of each monthly box.

• When making changes, first enter the indicator code for line 14 and then enter the indicator code for line 16. Separate the two codes with a slash (e.g., 1H/2A).

• If the same indicator code applies for all 12 months of the calendar year, enter that code in the “All 12 Months” column, and do not make entries for any of the months.

• If you are providing additional information about the changes for an employee, enter a check in the column titled “Additional Information Attached.” Otherwise, leave this column blank. NOTE: If more than one indicator code could apply for a month, enter only one code for that month on the Employee PTC Listing. Note any additional indicator codes that could apply for the affected employee in your signed statement. Include the employee’s name, the applicable months and the additional indicator codes for each month. We will review what you submit and will contact you.

Please ensure the signed statement and all documents submitted include the tax year and your employer ID number in the top right corner.

If we don’t hear from you

If you don’t respond by the Response date on the first page of this letter, we will send you a Notice and Demand for the ESRP that we proposed and assessed. The ESRP will be subject to IRS lien and levy enforcement actions. Interest will accrue from the date of the Notice and Demand and continue until you pay the total ESRP balance due.

To this this, you and your representative may need prompt access to your 2015 Forms 1095-C and your enrollment information for that plan year. If that data is hosted by a vendor, verify that access soon, because, just maybe, you’ve got mail.

The October 12, 2017 “Executive Order Promoting Healthcare Choice and Competition Across the United States” gets things rolling, but this ball will have to roll up hill for months before it can roll downhill.  Here’s why.

The meat of this matter is in § 2 of the Order:

Sec. 2. Expanded Access to Association Health Plans. Within 60 days of the date of this order, the Secretary of Labor shall consider proposing regulations or revising guidance, consistent with law, to expand access to health coverage by allowing more employers to form AHPs. To the extent permitted by law and supported by sound policy, the Secretary should consider expanding the conditions that satisfy the commonality‑of-interest requirements under current Department of Labor advisory opinions interpreting the definition of an “employer” under section 3(5) of the Employee Retirement Income Security Act of 1974. The Secretary of Labor should also consider ways to promote AHP formation on the basis of common geography or industry.

The referenced ERISA provision (29 U.S.C. § 1002(5)) says that “’employer’ means any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan; and includes a group or association of employers acting for an employer in such capacity.”

Historically, DOL has taken the view that a controlled group of corporations may have a group health plan that’s regulated in the same way as a plan sponsored by a single business entity, but that plans sponsored by multiple employers (and self-employed individuals) not commonly controlled must comply with relatively stringent and punitive rules for “multiple employer welfare arrangements.”  So-called “MEWA’s” are subject to both ERISA and to state health care insurance regulations, even if they are self-insured by the sponsoring employer group, unless the participating employers are contributing to the plan under contracts with a labor union.  Union-created multi-employer plans are favored in ERISA and in DOL rules.  See 29 CFR § 2510.3-40 and § 2570.151.

Here is an unofficial DOL summary of the dilemma.

[…]  [T]he Department has taken the position that a bona fide group or association of employers would constitute an “employer” within the meaning of ERISA Section 3(5) for purposes of having established or maintained an employee benefit plan. (See: page 8).

However, unlike the specified treatment of a control group of employers as a single employer, there is no indication in Section 3(40), or the legislative history accompanying the MEWA provisions, that Congress intended that such groups or associations be treated as “single employers” for purposes of determining the status of such arrangements as a MEWA. Moreover, while a bona fide group or association of employers may constitute an “employer” within the meaning of ERISA Section 3(5), the individuals typically covered by the group or association sponsored plan are not “employed” by the group or association and, therefore, are not “employees” of the group or association. Rather, the covered individuals are “employees” of the employer-members of the group or association. Accordingly, to the extent that a plan sponsored by a group or association of employers provides benefits to the employees of two or more employer-members (and such employer-members are not part of a control group of employers), the plan would constitute a MEWA within the meaning of Section 3(40).

Multiple Employer Welfare Arrangements under the Employee Retirement Income Security Act (EISA): A Guide to Federal and State Regulation,” p. 22 (U.S. Department of Labor, Employee Benefits Security Administration, Rev. August 2013).

State-by-state MEWA regulation makes operation across state lines quite difficult.  That’s the main problem that we think the President has told DOL to fix.  Our guess is based partly on statements made by Senator Rand Paul (R-KY), the prime mover in this situation.  His October 12, 2017 article published by Breitbart began: “President Trump will today legalize and allow individuals to form Health Associations and purchase insurance across state lines.”  But “today,” “legalize” and “allow” may be premature.

This disruptive executive action will draw heavy, sustained fire.  Opponents may argue that current DOL opinion is the only reasonable reading of ERISA’s relevant provisions, and that any change requires ERISA amendment by Congress.  They may say that enough of the current policy is found in formal rules so that the problem can be fixed only through formal rule-making, subject to judicial review after completion (in 2019, maybe). They will search for and play-up adverse collateral consequences of the policy change contemplated by the Executive Order.  A wise DOL Secretary won’t rush into this dark alley and it’s not clear who would bear the expense and take the risk of Association Health Plan roll-out before all such legal disputes are resolved.  Penalties for flagrant violations of MEWA rules can include jail time.

We’ll be watching this, but we won’t be holding our breath.


That’s the title of a web page that employers may find helpful upon receipt of an IRS communication asserting liability for employer mandate taxes under Code § 4980H.  It should have an official notice (“CP”) or letter (“LTR”) number on either the top or the bottom right-hand corner.  Entering that number in the search bar on the web page should display more information about the reason for the communication and what IRS expects in response.  There should also be a telephone number in the top right hand corner of the document that employers receive.

On the same web page, you’ll find a link to “Form 2848 Power of Attorney and Declaration of Representative.”  If you want another person to represent you in connection with the notice or letter, both the taxpayer and the designated representative must complete and sign the Form.  Page 1 of the Instructions for Form 2848 tells you where to mail or fax the Form.

Your designated representative need not be an attorney, if he or she is in another approved category and need not have an IRS CAF number, since a number will be issued upon receipt of the Form.  If the representative already has a nine-digit CAF number, it should be on the Form submitted.

We suspect that the initial letter will be a semi-formal precursor to Notice CP220J, which tells an employer that the IRS has “charged you an employer responsibility payment (ESRP).”   The return address on this Form is “Group 2219, 7300 Turfway Road Suite 410, Florence, KY 41042,” but no contact phone or fax number is listed. The explanatory CP220J web page is bare bones today.  We hope the IRS soon will hang some meat on it.

The Notice image posted under “Publications and Notices” (bottom of this article) is a mess; just count the contradictions.  And, we still don’t have the promised Internal Revenue Bulletin guidance about what, if anything, may precede issuance of Form CP220J.


Does the IRS expect to publish more information about the employer shared responsibility payment procedures?

Yes. The IRS expects to publish guidance of general applicability describing the employer shared responsibility payment procedures in the Internal Revenue Bulletin before sending any letters to ALEs regarding the 2015 calendar year.

“Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act,” No. 57, updated August 26, 2017.

If the IRS intends to keep that promise, it has just eight weekly editions of the Internal Revenue Bulletin to do so, and still provide employer notices at least 60 days in advance of January 1, 2018, when the three-year limit for such tax assessments begins to be relevant.

For budgeting purposes, note that the $166.67 monthly tax under Code § 4980H(a) that accrued during 2015 has risen to $183.33 for 2017 and the $250 monthly tax under § 4980H(b) for 2015 is $282.50 for 2017.

Update:  There was no related news in the September 11, 2017 Internal Revenue Bulletin.

We don’t blame you for hearing that whenever someone warns of employer mandate taxes coming your way.  Nevertheless, we’re donning the chicken suit once again to keep you aware.  This time, we’ll keep it short and mainly quote the government.

26 U.S.C. § 4980H(d)(1) – “Any assessable payment provided by this section shall be paid upon notice and demand by the Secretary, and shall be assessed and collected in the same manner as an assessable penalty under subchapter B of chapter 68.”

Section 4980H is better known as the ACA “employer mandate.”

26 U.S.C. § 6672(b)

(b) Preliminary notice requirement

(1) In general

No penalty shall be imposed under subsection (a) unless the Secretary notifies the taxpayer in writing by mail to an address as determined under section 6212(b) or in person that the taxpayer shall be subject to an assessment of such penalty.

(2) Timing of notice

The mailing of the notice described in paragraph (1) (or, in the case of such a notice delivered in person, such delivery) shall precede any notice and demand of any penalty under subsection (a) by at least 60 days.

(3) Statute of limitations

If a notice described in paragraph (1) with respect to any penalty is mailed or delivered in person before the expiration of the period provided by section 6501 for the assessment of such penalty (determined without regard to this paragraph), the period provided by such section for the assessment of such penalty shall not expire before the later of—

(A) the date 90 days after the date on which such notice was mailed or delivered in person, or

(B) if there is a timely protest of the proposed assessment, the date 30 days after the Secretary makes a final administrative determination with respect to such protest.

Section 6051 tells you how long the IRS can wait after tax accrual to assess the tax.

26 U.S.C. § 6501(a)

Except as otherwise provided in this section, the amount of any tax imposed by this title shall be assessed within 3 years after the return was filed (whether or not such return was filed on or after the date prescribed) or, if the tax is payable by stamp, at any time after such tax became due and before the expiration of 3 years after the date on which any part of such tax was paid, and no proceeding in court without assessment for the collection of such tax shall be begun after the expiration of such period. For purposes of this chapter, the term “return” means the return required to be filed by the taxpayer (and does not include a return of any person from whom the taxpayer has received an item of income, gain, loss, deduction, or credit).

Still, there are lots of open questions about the process that will lead to an assessment, and your right to raise assessment errors.  The latest IRS guidance (below) is aging ungracefully.

Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act” (April 20, 2017)

  1. When does the IRS expect to begin notifying employers that filed Forms 1094-C and 1095-C of potential employer shared responsibility payments?

The IRS expects that the letters informing ALEs that filed Forms 1094-C and 1095-C of their potential liability for an employer shared responsibility payment for the 2015 calendar year (with reporting in 2016) will be issued in 2017.

The IRS expects it will begin issuing letters informing ALEs that filed Forms 1094-C and 1095-C of their potential liability for an employer shared responsibility payment, if any, in the latter part of each calendar year in which reporting was due (for example, in late 2018 for reporting in 2018 for coverage in 2017).

  1. Does the IRS expect to publish more information about the employer shared responsibility payment procedures?

Yes. The IRS expects to publish guidance of general applicability describing the employer shared responsibility payment procedures in the Internal Revenue Bulletin before sending any letters to ALEs regarding the 2015 calendar year. In addition, the IRS expects to supplement that guidance in several different ways, widely distributing the information to ensure that ALEs are properly informed of when and how the IRS will be contacting them.

  1. How does an employer make an employer shared responsibility payment?

If it is determined that an ALE is liable for an employer shared responsibility payment after correspondence between the ALE and the IRS, the IRS will send a notice and demand for payment. That notice will instruct the ALE on how to make the payment. ALEs will not be required to include the employer shared responsibility payment on any tax return that they file.

The Internal Revenue Bulletin is published each Monday. Through Monday, August 14, 2017, no employer shared responsibility payment process guidance had been included.  Employer mandate taxes that accrued in January 2015 must be assessed by January 2018, absent an applicable exception.  The promised notices, if mailed at least 60 days in advance of January 1, 2018, must be in the mail by November 2, 2017, just eleven Mondays from now.  Keep your eyes on the skies.

As you have read here, the Senate’s finest hours were not those spent in July 26, 2017 health care policy debate, which resumed July 27 at 10:00 am EDT.  The bipartisan demagoguery did not diminish, but some Senators on each side rose above that fray and, in the end, Democrats won the narrowest possible victory in a fashion reminiscent of Auburn’s “kick six” win over Alabama.

The presiding officer noted the scheduled 2:15 pm EDT vote on the “Medicare for all” amendment offered by Senator Daines (R-Montana).  Senator McConnell (D-Kentucky) portrayed the Daines amendment as offering Democrats an opportunity to vote for a single payer system.  It didn’t sound like a peace offer; it sounded like a double-dog dare.  Silence fell for a half hour.  As our mothers told us all, “if you don’t have anything nice to say to someone, don’t say anything at all.”

Senator Carper (D-Delaware) broke the ice with a polite presentation noting broad agreement on goals of better insurance coverage of more people for less money, so that this has been, since 1993, an argument about means and methods. He then repeated and expanded on his history lesson from the prior day’s debate, which was one of that day’s few edifying performances.  In 2008, when Japan spent 8% of GDP on healthcare, we spent 18%, he said.  Acknowledging that every American can get emergency health care regardless of insurance or income, he critiqued the associated public costs and noted the cost savings achieved by widely available preventive care.  This wound up being a plea to recommit H.R. 1628 to committee for “regular order” proceedings, despite the lack of a pending motion of that nature.

Senator Schumer (D-New York) took the floor moments before 11:00 am, daring Republicans to offer a bill for final passage, even if that should be the “skinny repeal” bill rumored in the press.  However, he said, should “skinny repeal” be offered, Democrats will offer so many amendments that the extended debate on H.R. 1628 will significantly delay consideration of the National Defense Authorization Act, H.R. 2810.  Senator Schumer signaled that Democrats would not support the “Medicare for all” Daines amendment, because they regarded it as campaign bait.  Again, silence fell for a quarter hour.

Senator McCain (R-Arizona) and Senator Schumer then debated the wisdom of holding the National Defense Authorization Act hostage to the health care debate.  Senator McCain warned of the precedent of blocking a non-partisan defense bill due to dispute over a partisan bill, asking for a two hour interruption of health care debate to pass the NDAA.  Senator Schumer was unyielding in demanding that H.R. 1628 be recommitted as the price of floor action on H.R. 2810 in the foreseeable future.  After Senator McConnell declined that offer, Senators resumed health care discussion.

Senator Lamar Alexander (R-Tennessee), H.E.L.P Committee chair, explained why “repeal” and “replace” should be done in one bill. He forecast a “skinny bill” vote late in the day, conceding that any such bill will just be a vehicle to get to a House-Senate conference committee, where something more complex will be prepared for an up-or-down vote in each chamber.

Beginning around 11:35 am, Senator Peters (D-Michigan) described how insurance made available by the ACA gave a named constituent access to life-saving health care, briefly making a case for health care as a government-guaranteed right.

Senator Sanders (D-Vermont) rose at 11:45, reviving the prior day’s apocalyptic, sarcastic tone of debate, shouting that Republican proposals would cause thousands to be “thrown out of their nursing homes.” He predicted that defunding Planned Parenthood would lead to deaths of “thousands and thousands of Americans every year.”  Only the “top 1%” getting tax cuts would benefit from “throwing disabled children off of health insurance” under “this absurd Republican proposal.”  And the beat went on.  At length, Senator Sanders facetiously congratulated Senator Daines for offering a Medicare-for-all proposal and dared him to vote in favor.  Senator Sanders committed only to vote for his own Medicare-for-all proposal and thanked President Trump for admitting that Australia’s single-payer health care system is superior to ours.  Nearing the end of his time, Senator Sanders advocated federal prescription drug price controls, shamed health insurers for “outlandish” profits and CEO compensation and blamed our “bureaucratic, complicated system” of insurance on the multiplicity of insurers and policy terms.  Senator Sanders asked rhetorically whether Wall Street or drug company executives are “greedier” and personally attacked the Koch brothers for their wealth, showing enlarged photos of a $90,000,000 yacht and a billionaire’s mansion.

At 12:30 pm, Senator Moran (R-Kansas) turned the discussion to the “VA Choice” program that he said will fail within days unless new funding is authorized.  This, according to Senator Moran, is in the stack of legislation waiting for floor action after the health care debate.

Senator Flake (R-Arizona) took the floor at 12:44 pm to ask for immediate passage of H.R. 3298, to facilitate the receipt of public contributions to fund the medical expenses of officers wounded in the recent attempted assassination of Congressional Republicans.  Without objection, it was approved.

Senator Murray (D-Washington) then came to the well to decry a purported Republican plan to pass a “secret bill,” “in the dark of night,” to reach their goal “to kick tens of millions of people off their coverage,” in order to “give a massive tax break to the wealthy.”  Strong letter to follow, we supposed.

Shortly before 1:00 pm, Senator Sasse (R-Nebraska) remarked the unfortunate tendency of every dispute to become a “blood feud” and predicted that demographic and cost trends soon will force a binary choice between government rationing of entitlement medicine and a “disruptive, innovative,” “portable, affordable,” market-driven system.  Senator Sasse lamented that his choice will not be on the floor this week.  This was the Republican version of Senator Carper’s assessment – polite and perceptive.

There followed a “regular order” appeal by Senator Udall (D-New Mexico), who yielded to Senator Heinrich (D-New Mexico), who accused Republicans of a “shockingly rushed and secretive effort” to produce a “secret Trumpcare bill,” in order “to give a massive tax break to the wealthiest among us.”  Mentally ill people will lose their stabilizing medications, grandmothers will be thrown out of closing nursing homes, etc., due to “this appalling legislation.”  In closing, he referred to “real bipartisan solutions,” but identified none.

Senator Bennet (D-Colorado) picked-up on and expounded a point made by Senator Sasse: most uninsured people are uninsured only during short times between jobs, so insurance portability is key to minimizing the number of uninsured, but that is not a subject currently under discussion.  Further, he complained, the health care squabble is preventing agreement on even more pressing problems like infrastructure.  His solution: recommit H.R. 1628 to committee for regular order proceedings.

About 30 minutes before the scheduled vote on the Daines amendment, Senator Sullivan (R-Alaska) addressed the importance of “repealing, replacing and repairing” (emphasis ours) the current healthcare system, predicting that “we will probably be debating all night.”  He then denounced the National Defense Authorization Act hostage situation, noting that the NDAA won unanimous committee approval.

Well before 2:00 pm, the Senate entered a periodic hush, with few Senators on the floor, provoking a quorum call.  In four hours of debate, only Senator Sanders and Senator Sasse seemed to have taken seriously the single payer topic of the Daines amendment.  Finally, Senator Daines took the floor to explain his purpose – i.e., to focus attention on where the current system is heading without basic revision.  To do this, he copied and pasted Rep. Conyers’ (D-Michigan) entire House bill, H.R. 676, to create his H.R. 1628 amendment.  The Conyers bill, Daines said, has 115 House Democrat co-sponsors, and forbids private insurers to sell insurance policies in competition with its “Medicare for all” insurance.  Senator Daines invited Democrats to vote for his amendment or to acknowledge that they do not want to go where the current system is heading.

Another quorum call commenced at 2:18 pm, but was suspended when Senator Sanders rose again to congratulate Senator Daines again, offering to vote for the amendment if “five or six” Republicans also would vote in favor.  Otherwise, said Senator Sanders, Democrats would vote “present.”  As chuckles spread around the chamber, the Clerk began to call the roll.  No Senator voted for the Daines amendment.  All 52 Republicans plus Senators Heitkamp (D-North Dakota), King (I-Maine), Manchin (D-West Virginia), Nelson (D-Florida) and Tester (D-Montana) cast the 57  “no” votes.  The other 43 voted “present.”

At about 3:00 pm, the chair called-up the Strange (R-Alabama) amendment to block tax-funded abortion under the ACA.  However, most Senators had left the floor, none rose to speak, and so mics were muted again.  After about ten minutes, Senator Cornyn (R-Texas) resumed the debate.  Medicaid spending would rise by $71 billion over ten years under H.R. 1628, but that growth rate would be sustainable, unlike the current growth rate, he claimed.  After reciting Republican ACA talking points, Senator Cornyn yielded the floor to Senator Kennedy (R-Louisiana), who began by crediting Democrats with only good intentions when they passed the ACA.  However, he noted, doctors once bled their patients, with solely good intentions. When they learned it didn’t help, they stopped doing it.  ACA supporters are in the same situation, Senator Kennedy claimed.  He called the basic Healthcare.gov policy, “a bus ticket without a bus” and predicted days of remaining debate before a majority solution could be found.

Senator Wyden (D-Oregon) took the floor to claim that the majority’s unseen, rumored “skinny repeal” amendment was written during a just-concluded Republican lunch.  Nevertheless, he predicted severe Medicaid cuts based on a CBO score of a Democrat guess of what might be in a “skinny repeal” bill.  And, he announced a just-released Senate Parliamentarian decision that reconciliation may not be used to pass a “Trumpcare” provision permitting the states to redefine ACA “essential health benefits” and “affordability.”  Senator Wyden invited such states to seek ACA § 1332 waivers from HHS and offered Republicans “bipartisan cooperation” if reconciliation proceedings are abandoned.  Unlike prior speakers, Senator Wyden proposed a specific object of such cooperation: increasing payments to insurers to stabilize individual insurance markets.

Starting at 4:00 pm EDT, Senator Toomey (R-Pennsylvania) gave the Republican response to Senator Wyden, focusing on Medicaid’s need for reform, as part of the fiscal imperative of entitlement reform.  Medicare, Medicaid and Social Security comprise almost all of entitlement spending.  Only Medicaid has no associated, dedicated revenue stream and Medicaid is the fastest growing expenditure, growing much faster than the economy.  Senator Toomey recalled President Clinton’s proposal to cap Medicaid spending and read from Senator Murray’s 1995 letter pledging the support of all Senate Democrats.  The main difference between the 1995 proposal and today’s Republican proposal, said Senator Toomey, is that Republicans propose to impose the caps more gradually than did Senate Democrats in 1995.  Using a series of charts, Senator Toomey then critiqued the CBO scores of the BCRA and of H.R. 1628.

Senator Wyden offered, in rebuttal, to explore Medicaid cost restraint cooperation if the pending bill should be recommitted to the Finance Committee.

Up next, Senator Grassley (R-Iowa) complained of Democrat “hyperbole and fear-mongering,” designed to produce insurance market failure and adoption of single payer healthcare, he said.  Senator Grassley quoted at length from what Senator Daniel Patrick Moynihan said about the need for welfare reform in the mid-1990s, and read the dire, incorrect, predictions of those who opposed reform.  Unusually for Republican speakers thus far, Senator Grassley was as vociferous as any Democrat.

At 4:40 pm EDT, Senator Enzi (R-Wyoming) requested and received approval to hold the Strange amendment vote at 5:00 pm, with a brief interlude then to vote on unrelated H.R. 3364, before resuming debate on H.R. 1628.  Speaking to the ACA generally, Senator Enzi likened it to a 1970’s novelty gift, the Pet Rock, which had great marketing and packaging that did nothing to improve the quality of the rock but greatly increased its cost.

Beginning just minutes before the vote, Senator Strange quickly explained his proposal to extend the Hyde Amendment to ACA Exchange insurance purchase subsidies, so that, starting in 2019, 90% of such subsidies would be covered by the Hyde Amendment.  Senator Schatz (D-Hawaii) then made the expected process objection, Senator Strange requested the needed waiver, and Senators repeated the sort of supermajority vote taken on the Cruz and Heller amendments, with the same result – no waiver.

A round 6:30 pm EDT, Senator Enzi called-up Senator Heller’s amendment to repeal the excise tax on so-called “Cadillac” health insurance plans.  As usual, speakers seemed to ignore the change of tune and kept dancing their preferred dances.  Senator Blount (R-Missouri) explained his view that the individual and employer mandates are unconstitutional.  Senator Lankford (R-Oklahoma) read from constituent letters about the pain inflicted by the individual mandate and rising health care premiums and deductibles, calling the individual mandate a “poverty tax.”  He predicted no bipartisan solution because Democrats will not change or eliminate either mandate.  The “skinny repeal” idea, he said, is necessary because the CBO takes weeks to score each new proposal and can’t keep up with a wider floor amendment process.  He reminded Senators that the skinny plan does not alter pre-existing conditions protections or rules about annual limits, lifetime limits or kids on parents’ plans to age 26.

The big news of the 8:00 hour was the defeat (57-43) of Senator Schumer’s motion to recommit H.R. 1628 to the Senate H.E.L.P Committee with instructions to do something about the Cadillac plan tax.  Senator Heller (D-Nevada) then explained his amendment to kill that tax permanently, with the support of many groups normally aligned with Democrats and the ACA.  The roll call vote on his amendment consumed most of the 9:00 hour, and resulted in passage (52-48).

At 9:52 pm EDT, Senator McConnell offered a strike-all amendment dubbed the “Healthcare Freedom Act of 2017,” which had been released to the public about an hour earlier.  This was the long-awaited “skinny repeal plan.” It zeroed the individual and employer mandate taxes accrued after 2015, repealed the Medical Device Tax for three years, shifted one year of Planned Parenthood funding to community health centers, raised HSA limits and offered states $2B of funding for ACA § 1332 waiver requests and programs.  As soon as Senator McConnell finished speaking, Senator Murray (D-Washington) moved to recommit the “skinny repeal” plan to the H.E.L.P. committee, calling it “Trumpcare.”  Following that lead, Senator Murphy (D-Connecticut) called skinny repeal, “nuclear bonkers” and “health care arson,” designed to protect, “the freedom to go bankrupt” and the “freedom to die early.”

Senator Tester (D-Montana) took a more measured tone, expressing his worry about the consequences of skinny repeal for small rural hospitals.  Senator Brown (D-Ohio) then picked up where Senator Murphy had left off, accusing Senator McConnell of letting drug company and insurance company lobbyists write the amendment in his office.

Senator Manchin (D-West Virginia) renewed his plea that Senate leaders turn this policy debate over to members who had been state governors.

Senator Whitehouse (D-Rhode Island) then accused Republicans of being “beholden to a small handful of creepy billionaires,” and Senator Sanders again reviled the “absurd” process.

Senator Durbin (D-Illinois), using a copy of the amendment as a prop, cited a comment by Senator Graham (R-South Carolina) to the effect that skinny repeal is a fraud.  About 20 minutes later, Senator Kaine (D-Virginia) spoke to the same effect, with the Graham comment printed on a foam core enlargement.

Senator Booker (D-New Jersey) said that the debate had made him physically ill and warned that, “When health insurance rates go down, mortality rates go up.”

Senator Hirono (D-Hawaii) asked Republicans to show for ACA beneficiaries the same compassion that they had shown for her after her cancer diagnosis.  That exhausted the Democrats’ share of the debate time.

Senator Enzi took the floor at 11:09 pm EDT and ran out the clock on the Republicans’ allotted time, rebuffing eight attempts by Democrats to interject comments and questions.  Mostly, Senator Enzi read from and commented on the book, “Demystifying ObamaCare: How to Achieve Healthcare Reform,” by David G. Brown.  At one point of particular frustration with the interruptions, Senator Enzi reflected on former Senator Phil Graham’s warning that Democrats on healthcare “don’t care who drives the train, as long as it wrecks.”

By 12:07 am EDT, July 28, leaders had made a deal to give Democrats ten more minutes and Republicans five more minutes of rebuttal.  Senator Wyden (D-Oregon) predicted that “skinny repeal would be the gateway to full Trumpcare” and Senator Schumer promised that Democrats had “learned our lesson” and wanted to start over.  Senator Cornyn then reminisced about the partisan, secretive process Democrats used to pass the ACA and noted that the only specific cooperation offered by Democrats was to markedly raise payments to health insurers to subsidize their unsustainable losses.

The vote on Senator Murray’s motion to recommit began at 12:20 am and failed, 52-48, but there was obvious tension rising between Senator McConnell and Senator McCain.  The roll call on adoption of the “skinny repeal” amendment to H.R. 1628 began at 1:24 am EDT, with Senator McCain off the floor.  During the vote, Senator McCain re-entered and, standing near (but not facing) Senator McConnell, Senator McCain signaled his “no” vote, to a standing ovation from Democrats.  Senators Collins (R-Maine) and Murkowski (R-Alaska) also voted against the amendment, so that it failed, 51-49.

At 1:39 am EDT, Senator McConnell pulled H.R. 1628 from the floor and spoke words that communicated surrender, in a tone suggesting anything but.

In short, the ACA remains federal law to the same extent as before the November 2016 elections, except that we’re now months closer to IRS enforcement actions.