The coming year is a quiet one for health care reform implementation, but 2012 is significant in terms of whether the Patient Protection and Affordable Care Act (H.R. 3590) we know as the Health Care Act will continue as is.
The question is whether the act is constitutional in whole or part, and with two opposing federal appellate court decisions, the case has landed on the doors of the U.S. Supreme Court, which will decide whether to accept the case this year.
What next? And if the case is heard by the court this year, how will the decision affect the future of health care reform? We won’t know until 2012.
“Although 2012 is a quiet year in terms of what new provisions and regulations are required,” says Christopher Huryn, a partner at Brouse McDowell who works out of the firm’s Akron office in its Health Care Practice Group. “It’s a watershed year in many respects. 2012 will likely set the stage for where we go and how far we go with the Health Care Act as it stands today.”
For now, it’s a wait-and-see game.
Smart Business spoke with Huryn about what businesses should know about health care reform.
What court decisions have already been made concerning the Health Care Act?
Two conflicting federal appellate court decisions were made this year. Most recently, in August 2011, the United States Court of Appeals for the Eleventh Circuit (Alabama, Florida, Georgia) ruled that the individual mandate portion of the Health Care Act, which requires that all individuals have a defined level of health care coverage (or else be penalized), is unconstitutional. However, the court ruled that only this portion of the act was unconstitutional, and did not strike down the rest of the act.
Meanwhile, in June 2011, the Court of Appeals for the Sixth Circuit (Ohio, Michigan, Kentucky, Tennessee) issued a decision upholding the individual mandate, ruling that it is constitutional to require individuals to purchase health care. In response to these decisions, several trade groups, the U.S. Department of Justice, and 26 state attorneys general, including Ohio Attorney General Mike DeWine, filed petitions with the U.S. Supreme Court, asking the court to decide whether the Health Care Act is unconstitutional, in whole or part.
How soon could the U.S. Supreme Court make a decision about the constitutionality of the act?
In the coming months, the Supreme Court will decide whether to accept the appeal and hear the case during its current term, which began October 2011. With two conflicting rulings from the appellate courts, the procedural process to get this issue to the Supreme Court has been accomplished. However, although the process is complete, and both proponents and opponents are eager to get a decision on the Health Care Act, we must wait and see whether the Supreme Court agrees to accept the case. If it does, the court will likely hear oral argument in early 2012 and issue a decision by June or July of 2012.
What are some possible outcomes if the Supreme Court accepts the appeal and hears the case during this term?
The Supreme Court could rule that the entire Health Care Act is constitutional. Then, implementation of provisions and requirements would continue on schedule. Or, the court could rule that part or parts of the act are unconstitutional, such as the individual mandate. In that instance, legislators could go back to the drawing board to rewrite the unconstitutional issue(s). Or, the entire act could be ruled unconstitutional, and then we’re back to square one, although some contractual arrangements will continue, such as health insurance policies currently in effect that include provisions already implemented under the current Health Care Act.
For now, no one knows what will happen. We could be looking at very different health care reform legislation down the road if the current act is deemed unconstitutional. Or, we might continue on the very path we are going down today, implementing provisions over several years leading up to 2014.
What can business owners do in the meantime?
First, eligible business owners should be sure to take advantage of the Small Business Health Insurance Tax Credit. This credit is worth up to 35 percent of a small business’s premium costs in 2010 (25 percent for tax-exempt employers). On January 1, 2014, the rate increases to 50 percent (35 percent for tax-exempt employers). The credit phases out gradually for employers with average wages between $25,000 and $50,000, and for employers with the equivalent of 10 to 25 full-time workers. Talk to a professional about whether your business qualifies.
Second, before making any changes to your current health care coverage, keep in mind that certain ‘edits’ to your plan will not uphold the plan’s grandfathered status. A grandfathered plan is the one you had on or before March 23, 2010, when the Health Care Act was put into effect. You are allowed to keep that plan and, depending on the coverage, it could cost less than plans required by the individual mandate that goes into effect in 2014. So be sure to seriously consider any changes that could cause your plan to lose its Grandfathered status and could dramatically affect your bottom line in the future.
For now, the bottom line for businesses is to continue to work hard, be innovative and meet your customers’ needs — and wait to see what the Supreme Court decides in 2012.
Christopher M. Huryn is a partner with Brouse McDowell at the firm’s Akron office. Contact him at (330) 535-5711 or [email protected]