Health Care Reform Law Found to be Constitutional

The US Supreme Court ruled this morning that the Health Care Reform law is constitutional, including the individual mandate. While the implications of this decision are far-reaching, employers are advised to move forward with their compliance plans including their cost/benefit assessments in the future.    

Employers should move forward with immediate compliance mandates, some of which are below:

-Distribute a Summary of Benefits Coverage (four-page summary of benefits) with your next open enrollment.

-Companies with 250 or more employees must track their plans’ benefit value and report these amounts on 2012 W-2s that are issued in 2013. Smaller plans have one extra year to comply.

-Self-insured plans must begin paying a $1 per person tax beginning in plan years ending after September 30, 2012. This tax increases to $2 per person in 2013 and is indexed to medical inflation thereafter.

Some employers may receive a bit of a premium rebate from their insurance carriers. Insurance carriers must spend 80 or 85 percent (depending on plan size) of the premiums they collect on benefits, limiting their administration expenditures to 15 or 20 percent. Any rebates to be paid from the 2011 plan year begin on August 1, 2012.

Beyond 2012, employers will need to conduct a cost/benefit analysis to determine whether the tax payment, the Insurance Exchange, or continued coverage is best for their employees and business model. In both Colorado and Arizona, the state insurance exchanges are scheduled to go live in the late fall of 2013 for coverage effective January 1, 2014.

MSEC’s staff continues to follow this decision and its implications and will be providing further education and tools to help members meet the compliance mandates, as well as resources to assist in communicating with their employees. 

MSEC’s Benefit Update Conferences presented in July will provide more guidance to employers on this decision as well as on the Colorado Exchange. Click here for dates and locations. Or register by calling 800-884-1328. An MSEC Bulletin with more detailed information, and a Health Care webinar addressing the implications, will be offered to members in the near future.