The decision that the court is weighing is whether the federal government can subsidize those who acquired their plans through federal exchanges. The law is specific in that subsidies can only be awarded in exchanges that have been “established by the state.”
If the court rules that subsidies cannot be offered in the states, suddenly millions enrolled in the Affordable Care Act (ACA) will have to foot the entire bill for their insurance – not altogether a welcome prospect for many enrollees.
However, regardless of the decision, the impact of ACA has already created significant changes and challenges for the staffing industry.
What if the court favors ACA?
A favorable ruling for ACA in its current form is only good for business for the certainty it will now provide for planning. There are still many areas of the law which are very problematic and concerning.
The new 1094 and 1095 forms remain complex and companies will struggle to incorporate required data into their technologies for compliance by January 2016. And, while it is understood that the IRS will show grace for those who extend good faith efforts to comply with the new requirements, there is very little from the IRS regarding assistance.
Additionally, the grandfathered minimum value plans (MVP) are only good through 2016. The new Bronze plans are presently being built; yet, the cost of these plans remain very high and deductibles even higher.
Furthermore, there is some speculation regarding premiums for 2016. For some, increases well over 100% are expected.
What if the court strikes down federal subsidies?
On the other hand, should the court declare that these subsidies are indeed a violation of state’s rights, there is little doubt that major changes are in store for how health care operates in the USA, further adding complexity and confusion to the business community.
As mentioned above, businesses have been working hard to adjust to the new 1094 and 1095 forms requirements, spending millions of dollars for compliance. Should SCOTUS rule against the federal government, businesses will have spent this money to comply only to find out that filing will no longer be necessary. Perhaps this is a Hobson’s Choice, but it is certainly a lesson learned regarding passing bills just to “find out what’s in them.”
And there are more questions:
- What will become of the individual mandate? The employer mandate?
- How quickly can Congress move forward on modifications to ‘new’ health care laws so that business can also move forward?
Regardless of either decision, Congress must step to the plate and enact some practical solutions that would assist the country’s employers.
Some ideas are:
- Move from the 30 hour week to a 40 hour week. This provides clarity as to full time v. part time employees and would help eliminate any “gaming of the system” by employers (cutting hours) to avoid ACA
- Simplify the filing process. The current 1094/1095 filing requirements are very complex. And, many payroll/employment software tracking systems are not ready to handle the reporting requirements.
- Tort reform. This has been called-on for years, but doing so should eliminate some of the meaningless law suits regarding health care providers; thus, lowering malpractice insurance thus lowering costs of health care.
- Lower the participation rates. Most fully-insured plans have minimum participation clauses thus eliminating plans from consideration. This makes finding plan coverage almost impossible for staffing, retail, hospitality, and restaurants.
- Allow insurance companies to sell across state lines. This increases competition and, thus, lowers premium costs.
These very basic and manageable proposals that would not only benefit our health care system, but would certainly provide some reprieve for the businesses that are working every day to not only comply but offer real coverage to those who want to participate.
The Constitution Still Applies
In following this case, it’s clear that a lot of focus has been on the human element pending the outcome of the decision; but it is important to remember that our country has checks and balances for a reason.
It is not the job of the Supreme Court to fix this law for Congress, that responsibility remains with our representatives. If the Supreme Court acts in a legislative fashion it is far more dangerous then the justices demanding our representatives do their jobs.
The bottom-line? There are practical things Congress can and should do regardless of the court’s decision. It’s a question of will.