Yesterday's decision by the U.S. Supreme Court to uphold the major elements of the Patient Protection and Affordable Care Act, aka health care reform, does not change much from the employer's perspective. Even as the case has made its way through the courts, employers have had little choice but to comply with the provisions of the law as they have come into effect—for example, expanding health insurance coverage eligibility to adult children up to age 26.
The one major change resulting from the Supreme Court's decision will prevent the federal government from withholding Medicaid funding from states that choose not to participate in the 2014 expansion of Medicaid to individuals earning 133% of the federal poverty level. Under the ruling, the federal government cannot withhold all federal Medicaid funding from states that choose not to participate in the expansion of coverage; it can only withhold new funds available as a result of health care reform.
If some states opt out of Medicaid expansion, employers will need to keep track of these developments, particularly if they have a large portion of lower-paid employees who might be eligible for Medicaid under the expansion. This in turn could impact the operation of the state health insurance exchanges, which were designed to offer coverage to individuals who are not eligible for Medicaid under the 133% threshold and who have income up to 140% of the federal poverty level. We will be following up on this development as needed to assess what if any specific impact this could have on employer costs and coverage requirements.
Overall, the Supreme Court's decision releases employers from the holding pattern caused by the uncertainty that has hovered around the law almost from the moment of its passage. We will leave it to the political pundits to hash over the implications the November elections may or may not have on the law and its future. Now that the court has ruled, the first action employers can take is to communicate the Supreme Court's decision to employees and why their current plans will remain unchanged as a result.
Otherwise, employers need to get back to the legal and regulatory compliance and to continue communicating with employees about changes health care reform is bringing to employer-provided health plans now and in the future. "Employers should continue implementing the provisions that apply to the employer plan and keep the provisions that they have already implemented," says Steve Wojcik, vice president of public policy for the National Business Group on Health in Washington, D.C.
Looking ahead to 2014, employers will need to continue to focus on complying with and working with some of the major provisions of the law, including the health insurance exchanges and the coverage mandates. "Most employers, especially the larger ones, have looked at the employer mandate and the Cadillac tax and made some assessments about where they stand, changes and decisions they need to make and what kind of financial obligations they face for those provisions," says Wojcik. Those preparations are likely to continue and intensify, even though that implementation date is still 18 months away.