As you've undoubetedly heard, the Supreme Court ruled the Patient Protection and Affordable Care Act as consitutional. As an employer or HR Professional, what does this mean to you? Many things my friend, many things. A simple Google search will yield you so many results you'll go cross-eyed trying to read them all. Personally, I like the summary TLNT did on June 29th in their post title "Health Care Reform Upheld; Now It's Time for Employers to Get to Work". Here's a brief quote:
“Big Ticket” items for employers
Of all the employer obligations in ACA, those that are likely to have the most significant impact on plan design and costs will become effective in 2014 or shortly thereafter:
- The Employer “Play or Pay” Mandate – While much of the focus recently has been on the individual mandate, the more important mandate for employers is the “play or pay” mandate, which will require large employers (generally, those with 50 or more full-time employees taking into account full-time equivalents) to provide adequate and subsidized group health plan coverage to all full-time employees and their families beginning in 2014. If an employer fails to satisfy this requirement, it will be subject to a penalty – generally, $2,000 per full-time employee per year. This could have a significant economic impact on many employers. Accordingly, it is very important for employers to start modeling how this mandate will impact their bottom line starting in 2014.
- New Nondiscrimination Requirements — ACA prohibits most insured group health plans from discriminating in favor of highly-paid employees. If an employer’s plan fails to satisfy this requirement, the employer will be subject to significant financial penalties. Implementation of this requirement has been delayed to give regulators time to issue guidance. However, it is expected that this requirement will begin applying in 2014 or shortly thereafter. If you are offering different plans, eligibility periods, or premium subsidies to different groups of employees, it is likely that you will need to adjust your offerings to comply with these new nondiscrimination requirements.
- Automatic Enrollment — ACA requires most employers with more than 200 employees to automatically enroll new employees who are eligible for group health plan coverage. Rather than having to affirmatively elect health coverage, the “default” will be for employers to automatically enroll any eligible employee who fails to opt out. Statistics have shown that this type of enrollment process is certain to increase plan participation. Accordingly, it is likely to lead to higher plan subsidy costs for many employers. Implementation of this requirement has also been delayed to give regulators time to issue guidance on the requirement. It is expected that this requirement will also begin applying in 2014 or shortly thereafter.
If you still want more, here's a link to the SHRM email that went out to all members. They are hosting a webinar on July 11th at 1pm PT to cover additional information.
Jackson Lewis also has a great article here about the summary and implications for employers.
Whatever your opinion on the ruling, as an employer and/or HR Professional, it's something you need to familiarize yourself with, and soon. Catch a webinar, if you use Fidelity they have one next week, read some blogs, read the ruling yourself if you can keep your eyes focused. Whatever method you choose, just make sure you're informed as the Act will impact you, your company, or your family and friends in some way.