Back from the polls – Election 2014 and what it means for the ACA
Last week’s events in Washington D.C. may affect PPACA as we now know it.
Most notable was the fact that Election Day turned most of the country into a sea of red leaving pundits to speculate on the future of PPACA. Will it prevail? Even with a GOP-controlled Congress, getting any legislation to completely overhaul PPACA through the President would be wishful thinking. Perhaps the most disconcerting is the Supreme Court’s recent decision to hear a new challenge to PPACA. Here we go again….what could this mean for employers? While it’s unlikely that we’ll see many fundamental changes for employer-provided benefit plans, it doesn’t mean there won’t be minor tweaks to the law and how its provisions are applied.
We had a couple of minor but unexpected changes already reminding us that the law’s provisions can change on a dime. First, after employers were scrambling to comply, it was announced there is no longer a need to acquire a Health Plan Identification Number (HPID) as of November 15th due to an “indefinite delay.” Also announced was the fact that minimum-value health insurance plans must now include coverage for inpatient hospital and physician services.
A full repeal of PPACA will probably never happen given the provisions already in effect and the numbers game in moving a bill through Congress. However, compromises between the two parties are not out of the question and may be necessary to please both sides and the President. However, the most controversial provisions within PPACA may start to change before our eyes, including the medical device tax, the definition of a full-time employee and the Cadillac tax.
Also at play is the Supreme Court’s decision to grant certiorari in King v. Burwell. The question before the Court is “whether the Internal Revenue Service (“IRS”) may permissibly promulgate regulations to extend tax-credit subsidies to coverage purchased through Exchanges established by the federal government under section 1321 of the ACA.”
The law is currently written to allow subsidies for health insurance coverage that is purchased through an “Exchange established by the state.” Challengers are strictly interpreting the law to mean that only people residing in a state with their own health insurance Exchange can get subsidies, not if coverage is purchased through an Exchange that is federally facilitated.
Given that 27 states have Exchanges run by the federal government; this could be a real issue for Obamacare. If the Supreme Court rules that subsidies are limited to state-run Exchanges, the employer mandate would be in peril. If employees are unable to get subsidized coverage on Federal Exchanges, employers would never face a penalty for not offering coverage or offering unaffordable coverage. The employer mandate, unable to be enforced, would essentially be rendered void.
The whirlwind of politics and law in the past week can certainly make people unsure as to how to maintain compliance with PPACA. For now, there is no need to hit the alarm button but stay tuned to see how things unfold in the coming years.
As always, William Gallagher Associates will continue to monitor PPACA and its impact on employer groups. More details from WGA will be released as further guidance becomes available.
About the Author
Priya Setty is an Assistant Vice President in the Employee Benefits Group at WGA. Her role involves educating and providing compliance guidance to clients in applicable local, state and federal regulations affecting their insurance programs and employees. She is also a member of WGA’s Health Reform Advisory Committee.