Employers have been in wait-and-see mode pending the Supreme Court decision on health care reform legislation. If the court had overturned it, several mandates would have been scrapped for employers.
Now they will need to quickly turn their attention to fulfilling requirements that face serious penalties for non-compliance. Employers face several daunting questions, including what are the upcoming deadlines? What are the most immediate compliance demands? And what challenges will employers face to both provide affordable and comprehensive health benefits while keeping costs down?
“Now that the Court has ruled, U.S. employers will turn to executing the strategies for 2013 and 2014 that they have so far put on hold. In turn, agencies such as the Department of Labor, the Internal Revenue Service and Health and Human Services, will need to work overtime to issue the significant amount of guidance employers need to implement these rules,” said J.D. Piro, national practice leader in the Health Law Group of Aon Hewitt, in a statement released shortly after the Court’s announcement.
Aon says there are a number of actions employers will likely take moving forward:
Focus on managing complex compliance issues, including the implementation of summaries of benefits and coverage, understanding preventive care requirements for women for non-grandfathered plans and managing the individual mandate’s necessary reporting requirements.
Focus on communicating with their employees. Employers need to ensure their employees understand changes associated with the PPACA, like the new $2,500 health care FSA limit, and have the resources they need to make decisions accordingly.
Determine a retiree health care strategy. Many employers are moving away from sponsoring retiree health care programs as they utilize both government and private exchanges. With respect to prescription drug benefits, many employers are moving to a Medicare Part D employer group waiver plan in lieu of applying for the Medicare Part D retiree drug subsidy.
Explore alternative strategies like corporate health care exchanges to combat continued rising health care costs. A recent Aon Hewitt survey showed that 72% of companies are very or somewhat interested in exploring whether a corporate exchange model can be an effective long-term solution for managing the cost of an employee health plan.
Next up, employers will have to ensure they are distributing the Summary of Benefits and Coverage required for fall open enrollment. The SBC needs to go to current participants and all interested participants.
“The ACA provides employers an opportunity to redefine their role in health care and create a comprehensive health care strategy in 2013 to reflect this role.”
They’ll have to work fast—a recent ADP poll says employers found half or more of small and midsized companies are not prepared, even though the deadline is Sept. 23.