Healthcare Reform/ACA Changes: What’s Next for Employers?

BLR’s Healthcare Reform Countdown to 2014 download provides a detailed analysis of heatlhcare reform provisions and changes.

Hello. My name is Jessica Webb-Ayer, and I’m a Legal Editor at BLR.

Earlier this summer, the U.S. Supreme Court upheld the Affordable Care Act, also known as the ACA. The Court looked at two aspects of the massive healthcare insurance reform law: The individual mandate and the expansion of Medicaid.

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 that doesn’t really concern employers.

Employers have been anxiously awaiting this decision, but what do you do now that you have it? What do you need to be thinking about now?

First, employers have to think about the Affordable Care Act’s existing provisions. You must ensure you are aware of all of the ACA provisions that affect your organization and that you are in compliance with such reforms that are already in effect. For example, some reforms that are already in effect include:

• Coverage for adult dependent children;
• Restrictions on annual and lifetime limits on “essential health benefits;” and
• Elimination of preexisting condition exclusions for children.

Next, employers must think about provisions that are going to become effective in the future. You 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.

What are some of the more short-term issues? There are several things employers need to think about immediately. Let’s take a look at four examples.

• First, employers need to be concerned about the uniform summary of benefits and coverage requirement, which is effective for open enrollment periods beginning on or after September 23, 2012.
• Second, employers need to be thinking about W-2 reporting. For many employers, W-2 reporting is mandatory for the 2012 tax year.
• Third, the $2,500 cap on health flexible spending accounts begins in 2013.
• Fourth, employers need to be thinking about the comparative effectiveness fees. These are fees designed to fund the Patient-Centered Outcomes Research Institute.

Now let’s look at some provisions that will take effect in 2014 and beyond.

First, one of the most publicized provisions affecting employers becomes effective in 2014. This is the employer responsibility provision. Under this particular part of the Affordable Care Act, 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.

There are also other things employers need to be preparing for, including, for example:

• Certain nondiscrimination requirements;
• Automatic enrollment requirements; and
• Further insurance reforms.

Although the ACA has passed the Supreme Court’s scrutiny, that doesn’t mean there won’t be more debate over the law in the future, especially since healthcare reform is expected to remain a major issue in the 2012 elections.

However, even though there may be more speculation regarding the future of healthcare reform, you must:

• Remain in compliance with the provisions already in place;
• Continue to strategically plan for and implement the provisions set to go into effect in the future; and
• Be ready and watching for new healthcare insurance reform-related regulations and guidance.