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Expatriate Exemption on Health Law Riding on Spending Bill

By Melanie Zanona, CQ Roll Call

December 12, 2014 -- Legislation to exempt expatriate health care plans from the health law's coverage requirements is hitching a ride on the omnibus, the first in what could become a long string of provisions in the next Congress aimed at undermining President Barack Obama’s signature achievement.

Although the bill on its own enjoys bipartisan support, the idea has been caught in the deep divide over the health care law. The expatriate measure fell short in a suspension vote in the House before passing earlier this year, but it then was blocked from a unanimous consent request in the Senate. It now faces a potentially difficult Senate vote after the "cromnibus" was delayed and narrowly advanced by the House on Thursday.

“This was a long, tough battle,” bill sponsor John Carney, D-Del., said in a statement on Thursday. “Getting this bill passed required reaching across the aisle, persistence, the cooperation of many and a lot of hard work.”

Appropriators folded language into the fiscal 2015 spending measure (HR 83), or cromnibus, that is similar to a bill (HR 4414) passed by the House in April. The measure would not require health insurance plans for expatriates to comply with the individual and employer mandates under the health care law.

Expatriate health care plans are offered to workers outside their home country – such as corporate executives, nongovernmental organization employees, foreign aid workers, pilots, cruise ship workers and overseas contractors – and typically provide high-end, comprehensive coverage.

Lawmakers rebuffed a motion in April to advance the legislation under a suspension of the rules, an expedited process that requires a two-thirds majority for passage. The chamber later passed the measure with the support of 60 Democrats, after tightening the definition of an expatriate to someone who has been abroad for at least six months as opposed to three, echoing concerns raised during the legislation’s first floor debate.

“This is our second go around at this legislation,” Carney said on the House floor. “We’ve worked painstakingly to improve our bill, and we have.”

Bill authors again negotiated changes to make the measure more palatable in the Senate, but were unable to fast track the bill, facing opposition from conservative firebrand Ted Cruz. Hoping to avert a unanimous consent request and the potential that the legislation would die because of the narrowing window for legislative action in the waning days of the 113th Congress, lawmakers tacked the measure onto the critical spending legislation.

However, the Senate may now try to pass the cromnibus by unanimous consent Friday, where Cruz could be a likely dissenter because of Obama’s executive actions on immigration. The Texas Republican helped force a government shutdown last year over his objection to the health care law.

Supporters say the exemption is necessary to make American health insurance plans more competitive with foreign companies abroad, who do not have to comply with the health law’s requirements. “Cigna implemented a hiring freeze at its Delaware facility and has warned of potential layoffs should this legislation not be signed into law,” Carney said.

Critics worry the legislation would create loopholes that would allow people who are out of the country for only a few weeks or foreign workers in the U.S. to be sold substandard policies. “It allows big insurance companies to sell second-class insurance policies to American families and workers in the United States,” a group of senior House Democrats wrote in a “Dear Colleague” letter in April.

The language in the spending bill includes changes meant for the bill as it was teed up for Senate passage, such as requiring expatriate insurers to be licensed to provide health insurance in more than two countries and clarifying that expatriates in the U.S. must be on a work-related, specific and temporary purpose or assignment.

A Senate Democratic aide said the language is not considered a blanket exemption or rollback of the health law because expatriate plans would still be required to comply with reporting and affordability standards and provide benefits that are actuarially similar to or better than those offered by domestic health plans. The aide said expatriate plans were never meant to be covered by the health law and the bill would provide a legislative fix that the administration was open to.

The White House said in a Statement of Administration Policy prior to the measure’s passage in the House that it does not support the bill because it would “reduce consumer protections and create even more loopholes in the tax code.” But the administration on Thursday said it supports the fiscal 2015 spending bill.

Supporters of the expatriate bill called the opposition hypocritical since the administration has already granted the plans temporary relief from the law and said they had worked on the issue with the administration for several years.

Although the "expat bill" is a small and technical fix, the spending bill sets the stage for a larger battle with Obama over the health care law in the 114th Congress. The cromnibus also includes provisions that would rescind $10 million from the law’s Independent Payment Advisory Board and block the Centers for Medicare and Medicaid Services program management account from being used to make payments under the law’s “risk corridor” program.

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