Health Care Reform – What Employers Should Be Thinking About Now

Maureen M. Maly

Unconstitutional and Not Severable
Finally, it is possible the Supreme Court will find part of the health care reform law unconstitutional and strike down the entire law. Although many commentators believe this outcome is unlikely, it would cause the greatest change for employers. Under this outcome, employers would need to undo—or at least reconsider—all of the changes that they have made since 2010 to comply with the enactment of health care reform. Essentially, employers could return to operating their health plans as they existed before health care reform was enacted in March 2010.
For example, health plans would no longer be required to cover adult children under age 26, and coverage for most adult children up to age 26 would become taxable. Employers would be required to make changes to their financial statements for the post-65 retiree subsidy. Insured health plans would no longer be subject to the new nondiscrimination rules. Employers would regain the flexibility to apply HIPAA-compliant pre-existing condition limitations and exclusions to children, to apply annual and lifetime limits on plan coverage, and to impose limits on preventive care (instead of providing first dollar coverage). As a practical matter, many employees likely viewed these changes as positives and it may be difficult for employers to roll them back. Perhaps the biggest outcome of health care reform being struck down is that employers will not need to spend as much time and as many resources on health care reform compliance and can instead focus on efforts to control health care costs.
Impact of Elections
While the Supreme Court decision will likely bring some certainty at least for the short-term, the other element at play here is the November presidential and congressional elections. Republican candidates have largely pledged to repeal health care reform, if elected. And, even if full repeal is unlikely, we may well see changes to some provisions after the elections.
The waiting game continues. Wise employers will take action now to continue preparing to comply with health care reform provisions scheduled to become effective in 2012 and 2013, while at the same time preparing for possible change.


Health Care Reform – What Employers Should Be Thinking About Now Maureen M. Maly Unconstitutional and Not Severable Finally, it is possible the Supreme Court will find part of the health care reform law unconstitutional and strike down the entire law. Although many commentators believe this outcome is unlikely, it would cause the greatest change for employers. Under this outcome, employers would need to undo—or at least reconsider—all of the changes that they have made since 2010 to comply with the enactment of health care reform. Essentially, employers could return to operating their health plans as they existed before health care reform was enacted in March 2010. For example, health plans would no longer be required to cover adult children under age 26, and coverage for most adult children up to age 26 would become taxable. Employers would be required to make changes to their financial statements for the post-65 retiree subsidy. Insured health plans would no longer be subject to the new nondiscrimination rules. Employers would regain the flexibility to apply HIPAA-compliant pre-existing condition limitations and exclusions to children, to apply annual and lifetime limits on plan coverage, and to impose limits on preventive care (instead of providing first dollar coverage). As a practical matter, many employees likely viewed these changes as positives and it may be difficult for employers to roll them back. Perhaps the biggest outcome of health care reform being struck down is that employers will not need to spend as much time and as many resources on health care reform compliance and can instead focus on efforts to control health care costs. Impact of Elections While the Supreme Court decision will likely bring some certainty at least for the short-term, the other element at play here is the November presidential and congressional elections. Republican candidates have largely pledged to repeal health care reform, if elected. And, even if full repeal is unlikely, we may well see changes to some provisions after the elections. The waiting game continues. Wise employers will take action now to continue preparing to comply with health care reform provisions scheduled to become effective in 2012 and 2013, while at the same time preparing for possible change.
Chamber E-News - May/June 2012