June 20, 2012 (PLANSPONSOR.com) - Depending on the U.S. Supreme Court’s ruling on the constitutional challenges to the Patient Protection and Affordable Care Act (PPACA), numerous issues could arise for employer-sponsored health coverage.
Employers will need “immediate guidance” following the court’s decision, said Jim Klein, president of the American Benefits Council, during a conference call. The Supreme Court’s decision could affect several important provisions that employers have already implemented in response to detailed regulations and guidance over more than two years since the law was enacted.
The court could take several directions regarding the constitutionality of the individual mandate provision: uphold the individual mandate as constitutional; rule that only the individual mandate is unconstitutional and is “severed” from the rest of the law; rule that the individual mandate is unconstitutional and certain insurance reforms are also invalidated and “severed” from the law; or rule that the individual mandate is unconstitutional and the entire law is invalidated.
If Individual Mandate Is Constitutional…
If the court decides the individual mandate is constitutional, employers will be concerned about guidance from regulatory agencies about key elements of the law—particularly those that go into effect in January 2014—and they will have to “look forward very squarely about their obligations,” said Paul Dennett, senior vice president of health care reform at American Benefits Council.
Employers will need guidance about things such as what defines a full-time employee, as well as guidance about the “employer responsibility” provisions, which triggers a penalty for companies with 50 or more employees if a full-time employee obtains subsidized coverage either because the employer did not offer it or because the coverage the employer offered was too expensive or did not meet a test for “minimum value” established by the law.