Earlier this summer, the massive healthcare insurance reform law (also known as the Affordable Care Act or ACA) passed the U.S. Supreme Court’s scrutiny. More specifically, in a close 5-4 opinion, the Court held that the individual mandate is constitutional as a tax and upheld the healthcare insurance reform law’s expansion of Medicaid, with a new limitation. (According to the Court, the Medicaid expansion is lawful as long as the government doesn’t penalize states that decide not to participate in the new program by taking away their existing Medicaid funding.)
So now that the Court affirmed that the healthcare insurance reform law remains the law of the land, what are some of the important issues on the horizon that employers need to be thinking about?
Healthcare reform: Existing provisions
It’s imperative for employers to be familiar with the healthcare insurance reform law. This means ensuring they are aware of all of the ACA provisions that affect them and are in compliance with such reforms that are already in effect (e.g., coverage for adult dependent children, restrictions on annual and lifetime limits on “essential health benefits,” and elimination of preexisting condition exclusions for children).
Healthcare reform: Upcoming provisions
Employers most likely have already had to implement changes because of the law, but it’s not over. Although a lot of ACA provisions are already in place, there are still many provisions that will become effective in the next few years, and some are approaching more rapidly than others.
Short-term issues. There are several things employers need to think about immediately, including:
- The uniform summary of benefits and coverage requirement (effective for open enrollment periods beginning on or after September 23, 2012);
- W-2 reporting (which for many employers is mandatory for the 2012 tax year);
- The $2,500 cap on health flexible spending accounts (beginning in 2013); and
- Fees to fund the Patient-Centered Outcomes Research Institute (comparative effectiveness fees).
2014 and beyond. Employers also must start thinking about the employer responsibility provision that becomes effective in 2014. Under this particular part of the healthcare reform insurance law, employers with 50 or more employees face penalties if they don’t offer health insurance coverage or if the coverage they offer is insufficient. Employers subject to this provision must decide whether they are going to “pay or play,” which may involve performing a cost-benefit analysis.
Additionally, among other things, employers need to be preparing for:
- Certain nondiscrimination requirements;
- Automatic enrollment requirements; and
- Further insurance reforms.
Although the ACA overcame a large hurdle when the Court upheld its provisions, that doesn’t mean there won’t be more drama in the future. Healthcare reform most likely will remain a major issue in the 2012 elections, and many Republicans have already expressed their desire to repeal the law if the elections go their way. However, even though the ride on the healthcare reform roller coaster may not be over yet, employers must remain in compliance with the provisions already in place and continue to strategically plan for and implement the provisions set to go into effect in the future. They must also be ready and watching for new healthcare insurance reform-related regulations and guidance.
Healthcare Reform Resources
Jessica Webb-Ayer, J.D., is an attorney editor for BLR’s human resources and employment law publications. She has written and edited countless publications on labor and employment law and is the editor of the Benefits Compliance Advisor online newsletter and the benefits manual, Benefits Compliance: Strategies for Plans, Programs & Policies. Ms. Webb-Ayer has also worked on various Americans with Disabilities Act (ADA) and workers’ compensation/safety products. She graduated summa cum laude with a B.A. in Psychology from Lipscomb University in Nashville, Tennessee, and graduated cum laude with a law degree from the University of Tennessee College of Law in Knoxville, Tennessee. Ms. Webb-Ayer is licensed to practice law in Tennessee.
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