“Today’s decision gives employers and benefit professionals some clarity,” said Cara Woodson Welch, Vice President of Public Policy and Public Affairs at WorldatWork, in a statement. “Now that the constitutional debate over the health-care law has been resolved, employers should continue to focus their attention on ensuring that their health-care plans are in compliance with the Patient Protection and Affordable Care Act (PPACA). While we expect political debate to continue over health-care reform, employers are advised to keep moving forward with implementing PPACA and its governing regulations.”
Mercer advises that employers move forward with implementation of the law’s provisions or expect to pay a penalty. The high court’s decision affirms that Americans are required to have adequate health coverage starting in 2014 or pay a penalty. Also in 2014, employers that fail to offer full-time employees and their dependents affordable coverage with a minimum value likewise will face penalties.
In the near term, Mercer said, employers also must report the value of employer coverage on IRS Form W-2, cap dollar limits on health care flexible spending arrangements, and increase Medicare withholding for high earners (those earning more than $200,000 per year). They must also comply with the reforms already in effect, such as coverage of dependents up to age 26.
“But first and foremost, employers must estimate how the law will affect their business,” said Sharon Cunninghis, senior partner and leader of Mercer’s US Health and Benefits business. “Any employers who have not yet conducted a ‘health care reform check-up’ should make that their first order of business.”
American Benefits Council President James A. Klein encouraged regulators to keep things simple as they move forward with issuing guidance. “Throughout the legal challenges to the Patient Protection and Affordable Care Act, the vast majority of employers remained focused on meeting their obligations under the law," Klein said. "Whatever steps Congress and the Administration take from today forward must clarify – not complicate – employer responsibilities. If both branches of government focus on scoring political points, rather than helping employers and health insurers meet their obligations, then the majority of Americans who rely on employer-sponsored coverage will suffer."
Klein added: “Employers need answers quickly to a number of pressing issues, especially those related to the 2014 ‘shared employer responsibility’ provisions, how federal regulators will interpret the increased incentives for employer wellness programs, and whether the health insurance exchanges will operate as intended and be prepared to administer the new and complex premium subsidy program.”
Woodson Welch also called on rulemaking bodies to tread carefully. “Agencies should continue to seek feedback from employers and HR professionals before finalizing any new regulations governing employer-sponsored health care plans," she stated. "As new regulations are finalized, employers must be given adequate time to make the necessary changes to their benefit plans. Finally as new provisions of PPACA are enforced, WorldatWork strongly advocates that employers should not be burdened with penalties if they can demonstrate that they are working diligently and in good faith to comply with law."
According to Perry Braun, Executive Director of Benefit Advisors Network (BAN), the reform law focused on only one side of the equation – supply of services and reimbursement. “Insurance market reform, reforming and regulating the distribution and marketing, as well as regulating the development of insurance premiums and how you reimburse and compensate providers are not the only aspect of the cost equation," he said. "The Act does not address the demand side of the equation, which is where an equal amount of attention should be given."