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Focus turns to completing 2012 and 2013 compliance tasks
following the U.S. Supreme Court's decision.
Today, the U.S. Supreme Court ruled that virtually the entire
Patient Protection and Affordable Care Act of 2010 (ACA) is
constitutional (with the exception of a Medicaid issue that is not
directly relevant to employers), validating the full range of past,
present, and future ACA requirements. Employers now must continue
to press ahead with 2012 and 2013 ACA compliance requirements,
particularly if these tasks were placed on a back burner awaiting
the decision.
The Decision
Writing for a 5-4 majority in National Federation of
Independent Business et al. v. Sebelius, Chief Justice John G.
Roberts, Jr., found that the individual mandate in the ACA is a
permissible exercise of Congress's taxing authority, stating
that "[t]he Affordable Care Act's requirement that certain
individuals pay a financial penalty for not obtaining health
insurance may reasonably be characterized as a tax." Chief
Justice Roberts also wrote that "because the Constitution
permits such a tax, it is not our role to forbid it, or to pass
upon its wisdom or fairness." Chief Justice Roberts was joined
by Justices Ruth Bader Ginsburg, Sonia Sotomayor, Stephen G.
Breyer, and Elena Kagan. Justices Antonin Scalia, Anthony M.
Kennedy, Clarence Thomas, and Samuel Anthony Alito, Jr.,
dissented.
Next Steps for Employers
Now that the ACA has been upheld, employer group health plans
must focus on a number of pressing tasks for 2012 and 2013
compliance with the ACA. In the coming weeks and months, employers
should do the following:
Determine whether they are appropriately aggregating group
health plan valuation data in order to support 2012 Form W-2
reporting.
Prepare to receive, and properly distribute or apply, any
Medical Loss Ratio rebates associated with 2011 insured health
coverage.
Finalize Summary of Benefits and Coverage material for
inclusion in the 2013 Open Enrollment package.
Complete updates to Summary Plan Descriptions and plan
documents to capture and describe the 2011 and 2012 ACA changes to
their plan design.
Reflect the 2013 plan year $2,500 cap on salary deferral
contributions into healthcare spending accounts in 2013 Open
Enrollment material, payroll processes, and administration
systems.
Understand and begin to determine the patient-centered outcomes
trust fund fees due in July 2013.
Begin to identify whether their group health plans are both
affordable and available to full-time employees in order to avoid
any shared responsibility penalty in 2014.
Prepare for audits associated with their participation in the
Early Retiree Reinsurance Program, if applicable.
Review possible design changes to retiree drug programs to
reflect the change in Medicare Part D subsidy taxation rules.
Review future plan design changes to blunt the balance sheet
impact of the 2018 Cadillac Tax.
Implications
While the Supreme Court decision is an important milestone in
the federal debate over expanding healthcare coverage, it likely
represents just the first in a series of future federal discussions
and actions in the coming months and years.
The federal debate now moves to the November election cycle. The
ACA no doubt will play a large role in the upcoming elections, but
it is premature to expect any quick legislative reversals to ACA
provisions, as any changes would require a significant shift in
power.
In the interim, employer group health plans should continue to
examine and implement those ACA requirements that will be effective
in 2012, 2013, and later years into the design and operation of
their group health plans.
We will release future LawFlashes and hold webinars as further
guidance becomes available.
Our prior LawFlashes on the ACA, as well as material and
opinions from today's webinar, can now be found in one
location. Please visit our
Healthcare Policy and Reform resource page.
Copyright 2012. Morgan, Lewis & Bockius LLP. All Rights
Reserved.
This article is provided as a general informational service
and it should not be construed as imparting legal advice on any
specific matter.
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A female employee traveling for her employer met a "friend" and at her motel room with him became "injured whilst engaging in sexual intercourse when a glass light fitting above the bed was pulled from its mount and fell on her."
The "just cause" standard has long been a cornerstone of traditional labor law (under many collective bargaining agreements, employees generally cannot be discharged except with "just cause").
The Affordable Care Act provides employees who are not offered health coverage by their employers with the option of purchasing health coverage through new health insurance marketplaces (also known as health insurance exchanges) that will operate in every state.
Beginning in 2014, the Affordable Care Act will require "large" employers to offer their full-time employees healthcare coverage that meets certain standards or pay a penalty.
The Affordable Care Act’s employer shared responsibility rules will require large employers to make an offer of minimum essential coverage to at least 95% of their full-time employees or pay a non-deductible excise tax on all their full-time employees.
The Defense of Marriage Act (DOMA) defines marriage at the federal level as a legal union between one man and one woman and excuses states from any obligation to recognize same-sex marriages recognized in any other state.
Employers have until October 1, 2013, to provide notice to current employees of coverage options available through the Health Insurance Marketplace established under the Affordable Care Act.
Issues After The Election
