Regulatory: What clients still need to know about the Affordable Care Act
The U.S. Supreme Courts decision on the Affordable Care Act resolves the uncertainty about the constitutionality of the Act
July 05, 2012 at 07:40 AM
7 minute read
The original version of this story was published on Law.com
The U.S. Supreme Court's decision on the Affordable Care Act (ACA or Act) resolves the uncertainty about the constitutionality of the Act. With the exception that states have the option to forgo participation in an expansion of Medicaid without losing existing federal funding, the Court's 5-4 decision left the ACA intact.
Companies and other organizations now need to know what implementation of the Act means for them.
Perhaps the most important question for any employer is whether they can make employment decisions based on the Act as is or whether repeal or significant modification of the law is likely. Continuing uncertainty about the financial responsibility for healthcare prevents employers from making plans with the confidence they need to invest long term.
Clients can be all but certain that the Affordable Care Act will not be repealed.
Repeal of the Act is highly unlikely, even if the nation has a newly sworn in President Romney and there is Republican-control of the House of Representatives and the Senate. To repeal the Act or even amend it, the U.S. Senate would need 60 votes—not 51. This super-majority requirement reflects the rules and traditions of the Senate as applied in the hyper-partisan environment of Washington. (The GOP will not achieve a 60-vote majority in the Senate. Governor Romney's own campaign is projecting GOP control of the Senate with 51 or 52 seats, well short of the 60-vote threshold.)
If repeal is unlikely, what can employers' expect?
No matter who wins the White House, it seems likely employers will at minimum see changes in the implementation of the ACA. Policymakers from both parties are already discussing addressing controversial elements of the Act. Even President Obama has said he is open to amending the ACA.
The changes under discussion reportedly range from addressing the religious implications of including birth control in insurance plans to adjusting the timing of state Health Benefit Exchanges. None of the changes being reported on appears to present a new, material financial risk to employers generally.
As the implementation timelines are relatively short, employers need to follow the activity in their states as much as much as they do the decisions in Washington. Individual state decisions will drive many of the key details of the ACA's implementation.
The biggest decision is whether your state will decide to expand Medicaid; if all 50 states expanded Medicaid availability under the Act, it is estimated it would bring health care coverage to an estimated 16 million people. So far, the states are sharply divided on Medicaid expansion, however, so full implementation seems unlikely at this time.
Another major state question is whether a state will implement insurance exchanges on their own, in partnership with the federal government or rely on a Federally Facilitated Exchange. The takeaway for most employers is that under any of the three scenarios insurers will be competing for business through an exchange, perhaps creating competition that will reduce costs.
The court's ruling will also accelerate the already substantial implementation efforts among states. Therefore, preparing for a fully implemented ACA is a prudent business decision, even recognizing it may be amended later.
The automatic enrollment requirements of the ACA provide an example of why employers should start thinking about the future now. Under the Act, the Department of Labor will require that new hires for large employers—200 or more employees—be enrolled in health plans automatically. This requirement will not be effective until at least 2015, but its implications for employers are significant and require planning for compliance and budgeting purposes.
As the cliché goes, the Court's decision was the end of the beginning for the ACA. Employers now must plan for full implementation of the Act mindful of amendments, but knowing that repeal should not be counted on.
The U.S. Supreme Court's decision on the Affordable Care Act (ACA or Act) resolves the uncertainty about the constitutionality of the Act. With the exception that states have the option to forgo participation in an expansion of Medicaid without losing existing federal funding, the Court's 5-4 decision left the ACA intact.
Companies and other organizations now need to know what implementation of the Act means for them.
Perhaps the most important question for any employer is whether they can make employment decisions based on the Act as is or whether repeal or significant modification of the law is likely. Continuing uncertainty about the financial responsibility for healthcare prevents employers from making plans with the confidence they need to invest long term.
Clients can be all but certain that the Affordable Care Act will not be repealed.
Repeal of the Act is highly unlikely, even if the nation has a newly sworn in President Romney and there is Republican-control of the House of Representatives and the Senate. To repeal the Act or even amend it, the U.S. Senate would need 60 votes—not 51. This super-majority requirement reflects the rules and traditions of the Senate as applied in the hyper-partisan environment of Washington. (The GOP will not achieve a 60-vote majority in the Senate. Governor Romney's own campaign is projecting GOP control of the Senate with 51 or 52 seats, well short of the 60-vote threshold.)
If repeal is unlikely, what can employers' expect?
No matter who wins the White House, it seems likely employers will at minimum see changes in the implementation of the ACA. Policymakers from both parties are already discussing addressing controversial elements of the Act. Even President Obama has said he is open to amending the ACA.
The changes under discussion reportedly range from addressing the religious implications of including birth control in insurance plans to adjusting the timing of state Health Benefit Exchanges. None of the changes being reported on appears to present a new, material financial risk to employers generally.
As the implementation timelines are relatively short, employers need to follow the activity in their states as much as much as they do the decisions in Washington. Individual state decisions will drive many of the key details of the ACA's implementation.
The biggest decision is whether your state will decide to expand Medicaid; if all 50 states expanded Medicaid availability under the Act, it is estimated it would bring health care coverage to an estimated 16 million people. So far, the states are sharply divided on Medicaid expansion, however, so full implementation seems unlikely at this time.
Another major state question is whether a state will implement insurance exchanges on their own, in partnership with the federal government or rely on a Federally Facilitated Exchange. The takeaway for most employers is that under any of the three scenarios insurers will be competing for business through an exchange, perhaps creating competition that will reduce costs.
The court's ruling will also accelerate the already substantial implementation efforts among states. Therefore, preparing for a fully implemented ACA is a prudent business decision, even recognizing it may be amended later.
The automatic enrollment requirements of the ACA provide an example of why employers should start thinking about the future now. Under the Act, the Department of Labor will require that new hires for large employers—200 or more employees—be enrolled in health plans automatically. This requirement will not be effective until at least 2015, but its implications for employers are significant and require planning for compliance and budgeting purposes.
As the cliché goes, the Court's decision was the end of the beginning for the ACA. Employers now must plan for full implementation of the Act mindful of amendments, but knowing that repeal should not be counted on.
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