5 Things HR Experts Need to Know About the Supreme Court’s Health-Care Decision

By: WorldatWork Public Policy Staff

July 3, 2012 - Last week’s Supreme Court ruling on health-care has generated countless news reports, opinions and reactions. What does it all mean? It’s certainly hard to separate what’s truly important and what’s political rhetoric. To simplify things, here is a list of the top main points human resources professionals should understand about the decision and what it means for employers.

1. U.S. Supreme Court ruled that the health-care law is constitutional, which means nearly all of its provisions will be implemented and enforced.
The Supreme Court ruled that the vast majority of the Patient Protection and Affordable Care Act (PPACA) is indeed constitutional. The only section of the law that was struck down by the Court was part of the Medicaid expansion for the states. This means that all of the provisions governing employer-sponsored health plans will be enforced. All ongoing rulemaking activities (regulations being drafted by federal agencies to enforce the law) will continue to move forward. Employers will face significant penalties if they fail to ensure that their health-care plans meet the law’s new standards.

2. This is the final word on the constitutionality of PPACA.
Legal challenges may be filed over the regulations for some of the law’s provisions, but the major question over whether or not the law itself is constitutional has been settled. The Supreme Court has spoken and ruled that the law is constitutional – which means it is the law of the land. The Supreme Court will not be reviewing this issue in 2014 when the individual mandate is enforced. The only way this changes is if the republicans retain control of the House, win the Senate and win the White House in the November elections and then vote to repeal it.

3. Expect lots of political debate over health-care and taxes leading up until November elections.
The Supreme Court’s decision has teed up both political parties for highly contentious debates over health-care and taxes for the upcoming election. The House has already scheduled a vote to repeal PPACA for July 11. HR professionals need to keep in mind that for now this is all part of the political theater leading up to the elections. Do not be fooled into thinking you can continue to “wait and see” if the law will get repealed. If the repeal vote passes the House, it will die in the democratic controlled Senate. Waiting to comply with PPACA, is no longer an option for employers. They need to evaluate their health-care plans now and determine what they must do to ensure their plans comply with the federal law.

4. Get Ready: 2013 and 2014 will bring significant changes for employer-sponsored health plans.
Several provisions from the health-care law have already been implemented such as the requirement to cover dependent young adults up to age 26. Many more will kick in over the next two years. First up, employers need to be prepared to distribute Summary of Benefit Coverage disclosures to eligible participants in their employer-sponsored health plan. The deadline for this disclosure for 2013 plans is September 23, 2012. HR practioners can reference the WorldatWork Health-Care Reform Timeline for up-to-date deadlines outlining when the employer related provisions will be implemented.

5. Both the individual and employer mandate provisions of the law will become effective in 2014.
These “shared-responsibility” requirements are a significant part of the health-care law. The primary goal of both the individual and the employer mandate is to bring more participants into the insured health-care population. Until the state exchanges prove to be accessible and affordable, employers should expect an uptick in the number of eligible employees and dependants that elect to participate in employer sponsored health-plans. Once the minimum coverage regulations are finalized, HR professionals need to ensure that their health-care plans meet these standards. If their plans do not meet these standards, employers will be hit with significant penalties.