June 21, 2012
Authored by: benefitsbclp
This is the first in our series of “What if” posts on the possible outcomes of the Supreme Court hearings on the health from law. Please come back for parts 2 and 3!
The Supreme Court is likely to release its decision on the Patient Protection and Affordable Care Act (aka health reform) in the very near future (likely no later than the 28th). Reading the proverbial tea leaves, it seems likely that the Court will not kick the can down the road by saying the Anti-Injunction Act applies, so we will probably get a decision upholding some, all or none of the law.
If the Supreme Court upholds the law in its entirety, then there is good news and bad news. The good news is that all that work you did to prepare for PPACA was not in vain. The bad news is that the work is far from over. While this is the result that Chris predicted in October, it became much less of a certainty after Justice Kennedy asked the U.S. Solicitor General if he had a “heavy burden” to demonstrate that the individual mandate was constitutional.
So what if PPACA survives? The short immediate list of “to dos” includes:
- Summaries of benefits and coverage are due for the first open enrollment beginning on or after September 23.
- Form W-2 reporting of the cost of health coverage will be required for most employers for 2012.
- Employers will need to amend their health FSAs by the end of 2014 plan year to comply with the $2,500 limit on employee contributions.
- The comparative effectiveness fee (discussed here) will be due this year.
- The first medical loss ratio rebates will be due this year.
- Prepare for the 2013 increase in Medicare tax
Additionally, for 2014, employers will need to prepare for:
- 90-day limitations on waiting periods.
- The complete elimination of pre-existing conditions (to the extent group health plans have those).
- The “shared responsibility” (aka “play or pay”) penalties for employers who either (a) fail to offer health coverage or (b) offer health coverage that is either “unaffordable” (as defined by PPACA) or does not provide “minimum value” (as to be defined by the agencies).
- The filing of new information returns to the IRS and their delivery to certain full time employees.
- Increased incentives for wellness programs of 30% of the cost of coverage (and up to 50%, if HHS increases the incentive, as the statute allows).
And at some yet-to-be determined date(s), employers will need to prepare for:
- Non-discrimination rules for insured health plans.
- Automatic enrollment in health plans for employers with at least 200 employees.
And last, but not least, the “Cadillac Tax” on high-cost health plans, to come into effect in 2018.
We will keep updating the blog and provide client alerts on developments as they arise, so stay tuned!