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Year-end Funding Bill Breakdown

House and Senate appropriators agreed to a $1.4 trillion spending package last night that includes major implications for our member firms. In short, the deal:

  • Reauthorizes the Terrorism Risk Insurance program
  • Reauthorizes the National Flood Insurance program
  • Reauthorizes the Ex/Im Bank and secures the Reinsurance Program
  • Repeals the Cadillac Tax
  • Excludes Surprise Medical Billing and drug pricing transparency provisions

One word of caution — this is a very delicate environment and passage is not completely assured. In the meantime, here is a link to the bill. (For the nitty-gritty: Extension language — for NFIP and TRIA — starts on page 1214. The Cadillac Tax overturn is on page 1481.) Our points of emphasis for each program are below.

Reauthorizes the National Flood Insurance program

The National Flood Insurance Program (NFIP) will be reauthorized until September 30, 2020, the end of the fiscal year. Anything later would have tripped the need for reforms, which would have put the entire funding bill in jeopardy since reforming the NFIP has become increasing political and divisive.

Reauthorizes the Terrorism Risk Insurance program

The Terrorism Risk Insurance Act (TRIA) will be reauthorized for the next 7 years, so until December 31, 2027. The extension language mirrors what was voted on by the House. No real reforms were made, but it includes a requirement for the Treasury to evaluate the ability of insurance for places of worship and directs the Government Accountability Office to report to Congress the potential costs of cyber terrorism. This is welcome news considering the last reauthorization provided a 6-week lapse.

Reauthorizes the Export/Import Bank and secures the Reinsurance Program

The Export Import Bank received an extension to 2027 and made permanent a credit risk transfer program codifying its ability to access private reinsurance markets. The reauthorization was a controversial measure with separate competing measures in the House and Senate. The Council is thrilled with the final language.

Repeals the Cadillac Tax

The Council is ecstatic to announce that the end of year government funding agreement includes language to fully repeal the Cadillac Tax, the Hit Tax, and the Medical Device Tax. The Council has worked for years alongside the employer community and organized labor to see an end to the Cadillac Tax. Passed in 2010 as part of the Affordable Care Act, the measure imposed a 40% excise tax on plans with annual premiums exceeding $10,800 for individuals or $29,500 for a family. Implementation of the tax has been previously delayed to 2022.

The major hurdle to the effort was the $87 billion cost associated with a complete repeal. In 2009, the Congressional Budget Office derived the $87 billion dollar figure by assuming that employers would increase salaries (thereby increasing taxable income) as they scaled back benefits to avoid hitting the threshold. We firmly disagreed with the assessment that most companies will cleanly shift money from employee benefits to employee salaries.

Surprise Medical Billing Stalled

Legislation to end Surprise Medical Bills is now stalled in the U.S. House of Representatives, without a clear path forward. The dramatic pause for the bill comes after a burst of momentum from last week’s announcement that a bipartisan deal was made between House and Senate leaders on a benchmark and arbitration hybrid approach to address balance billing. That deal relied heavily on a median in-network regional market rate for applicable services, with defined arbitration for charges exceeding $750. And critical to Council members, it also included several provisions from last June’s Senate HELP Committee legislation that would require PBM reforms and transparency for various stakeholders involved in drug pricing schemes, including brokers. Click here to read our previous alert on the deal.

Days after the announcement, Ways and Means Committee leaders Richie Neal and Kevin Brady announced their own deal, which countered the benchmark approach with a strong arbitration model. In order to advance to the House floor, the bill needs to be considered by three House committees – Energy and Commerce, Ways and Means, and Education and Labor. As of now, there is no consensus between the committees that would allow the measure to reach the House floor.

The debate has fiercely divided the insurance community and the providers. The Council continues to support a benchmark approach for surprise medical bills, and transparency for drug pricing schemes. There will be more to come on this topic.

As always, we will keep you posted. Thanks for all of your support for our efforts on Capitol Hill.

Please contact Joel Wood at, Joel Kopperud at or Blaire Bartlett at with any questions.