The Relationship Between Congress and Obamacare

Senator Chuck Grassley (R, Iowa), called for a requirement in the ACA that Congress and staffers obtain coverage in the exchange
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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. 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 (ie, people who don't have access to affordable employer-sponsored coverage or government-run coverage like Medicare, Medicaid, and CHIP). But the ACA generated 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. From 2014 through 2018, this was enforced with a tax penalty, although the penalty has been eliminated as of 2019. Other ACA requirements apply to employers and health insurance carriers, but the requirement for individuals is just to maintain coverage; this requirement is still in effect, despite the fact that there's no longer a federal penalty to enforce it.

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.

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. [For perspective, In 2018, employers that offered health benefits paid an average of $5,711 per year in premiums for single employees, and an average of $14,069 in premiums for employees with family coverage. This amounts to almost 83 percent of the total premiums for single employees and 72 percent of the total premiums for family coverage.]

Switching to the individual market exchange would have eliminated access to employer contributions, as the ACA forbids employers from paying for individual market coverage for their employees (this rule has been relaxed under the Trump Administration, via the expansion of health reimbursement arrangements). 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.

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 then-Senate Majority Leader, Harry Reid (D, Nevada).

Because of the OPM's ruling, Congress and their staffers still receive their full 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 until the penalty was eliminated at the end of 2018) 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, although many states no longer have operational small business exchanges). 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.

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Article Sources

  • Read the Affordable Care Act.

  • Kaiser Family Foundation, 2018 Employer Health Benefits Survey. October 3, 2018.

  • Kaiser Family Foundation, Health Insurance Coverage of the Total Population. 2017.

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

  • Office of Personnel Management. Frequently Asked Questions: Insurance.