On June 28, 2012, the Supreme Court announced its decision to uphold the majority of President Barack Obama’s 2010 healthcare law. Known as the 2010 Patient Protection and Affordable Care Act (PPACA), the law includes hundreds of provisions.
The Supreme Court upheld the mandate that all nonexempt individuals maintain a minimum level of health insurance coverage or pay a tax penalty. It also upheld new reporting requirements and mandates for employers that offer coverage to their employees, as well as coverage and benefit requirements for health insurers.
While the Supreme Court’s decision confirmed that Americans will see significant changes to the health care industry in the coming years, it also left many individuals wondering about the personal impact this decision will have on them, their families and their businesses.
“While the Supreme Court’s ruling does not affect current coverage for most health insurance policy holders, it is understandable that many are wondering how the ruling affects them personally in the future,” says Marty Hauser, president of SummaCare, Inc. “And although we don’t have all the answers, we do know some things to help employers and individuals work their way through the mandates and provisions of PPACA that may affect them.”
Smart Business spoke with Hauser about what the Supreme Court’s decision will mean to individuals and employers in the coming years, as well as what employers should be doing now to prepare for the upcoming mandates.
What does the Supreme Court’s ruling mean for the average American?
The ruling of the Supreme Court and the provisions under PPACA affect everyone, from the individual with pre-existing conditions to someone who can’t afford health insurance, to the employer that provides coverage to employees and the health insurance company that administers the plan and benefits. Overall, the goal of PPACA is to make health care coverage available to more individuals than ever before.
The ruling not only affects the availability and affordability of health care, but it offers peace of mind for individuals by requiring insurers to provide 100 percent coverage of some benefits, including preventive care and wellness visits, immunizations and some types of counseling and testing.
What are the next mandates and/or provisions that will affect employers and individuals?
Effective Aug. 1, health insurers are required to cover women’s preventive services at 100 percent. This includes well-woman visits; gestational diabetes screening for women 24 to 28 weeks pregnant and those at high risk of developing gestational diabetes; human papillomavirus DNA testing every three years; sexually transmitted infection counseling and HIV screening and counseling; contraception and contraceptive counseling; breastfeeding support, supplies and counseling; and domestic violence screening.
In addition to newly covered preventive services for women, another provision of PPACA that will affect employers and individuals is the Summary of Benefits and Coverage provision. The SBC provision applies to both fully-insured and self-funded group health plans and is meant to help employers and individuals compare benefits between different insurers and/or plans.
The SBC document is designed to describe health plan benefits, including what the plan will cover, limitations and coverage examples. The SBC document must be provided to participants of a health plan enrolling or re-enrolling on or after Sept. 23, 2012. Check with your insurer to determine their process for providing the SBC.
What mandates go into effect in 2013 that will impact employers and/or plan sponsors?
Upcoming mandates slated to go into effect in 2013 for employers and/or plan sponsors include Form W-2 reporting for the 2012 tax year; a $2,500 limit on employee contributions to health Flexible Spending Accounts for plan years beginning in 2013; a requirement for employers to notify employees of the availability of health insurance exchanges; a 0.9 percent tax on earned income of high-income individuals under the Federal Income Contributions Act; and a 3.8 percent Unearned Income Medicare Contribution tax for high income individuals/families.
What mandates go into effect in 2014 that will impact employers and/or plan sponsors?
Mandates effective in 2014 include the ‘pay-or-play’ mandate; employer certification to Health and Human Services regarding whether the group health plan offered to employees provides minimum essential coverage; an increase in permitted wellness incentives from 20 percent to 30 percent; automatic enrollment of new employees in a group health plan for large employers with 200 or more employees; a 90-day waiting period limit for coverage; coverage of certain approved clinical trials for non-grandfathered plans; guaranteed availability and renewability of insured group health plans; prohibition on pre-existing condition exclusions; and complete prohibition on annual dollar limits, which will primarily impact those in the individual market.
What should employers/plans sponsors be doing now to prepare for upcoming mandates?
The most important thing employers or plans sponsors should do now is to start talking to their insurer about insurance options available to them and consider their long-term goals and strategies. It’s also important to figure out when the mandate and provisions will affect the coverage and benefits offered to employees, as some mandates and provisions go into effect upon renewal and are not automatically required, and not every provision applies to each plan type.
Because parts of the mandates and rules aren’t fully written, guidance is still needed. Employers and plan sponsors should pay attention to information regarding upcoming items as information is released.
Marty Hauser is the president of SummaCare, Inc. Reach him at [email protected].
Insights Employee Benefits is brought to you by SummaCare, Inc.
