President-elect Donald Trump has nominated House Budget Committee Chairman Tom Price, R-Ga.—a former orthopedic surgeon and staunch critic of President Obama's signature Affordable Care Act (ACA)—to be secretary of Health and Human Services (HHS). Price has sponsored the Empowering Patients First Act to replace the ACA.

Price's bill would expand the use of health savings accounts (HSAs), allow employers to provide a defined contribution health care benefit, and includes a controversial proposal to cap the deduction for premiums in employer-sponsored group health plans.

The Empowering Patients First Act would derive part of its funding—to offset individual tax credits—from limiting the employer tax exclusion or deduction of health care premiums at $8,000 for individual coverage and $20,000 for family coverage. Unlike the ACA, however, in Price's bill contains no 40 percent excise tax on employers' high-value health plans. The ACA's so-called Cadillac tax, now scheduled to take effect in 2020, would apply to plan premiums over $10,200 for individuals and $27,500 for families.

"I think employers would be much happier with a cap on the deduction than they would be with a 40 percent excise tax on premiums," said Brian Pinheiro, chair of the employee benefits group at law firm Ballard Spahr in Philadelphia. "The lost deduction is a lot less punitive when you look at it on an after-tax basis. If your effective corporate tax rate is under 40 percent, which for most companies it would be, the deduction is going to be a cheaper alternative."