5 Immediate Steps for Businesses Now That Obamacare Upheld

“Although the Act was deemed largely constitutional, issues concerning the implementation and administration of the Act’s various coverage mandates may be litigated in years to come. For example, dozens of Catholic dioceses and schools filed lawsuits in a number of states charging the Act’s contraception coverage requirement violates their rights under the First Amendment to the U.S. Constitution. Separately, employers and plan sponsors could face litigation over whether the Act’s coverage mandates were implemented and administered correctly.” (Supreme Court Upholds the Affordable Care Act’s Individual Mandate: What It Means for Employers and Plan Sponsors by Proskauer Rose LLP)

Yesterday’s U.S. Supreme Court ruling to uphold the Patient Protection and Affordable Care Act doesn’t mean the end of legal challenges to health care reform efforts, but it does mean that employers can no longer wait to make the changes required by the law.

For your reference, five actions small and medium-sized business should take today to ensure current and future compliance:

1. Continue implementing changes already underway:

“… it is vital for employers to continue their efforts to implement the Act’s various provisions while bearing in mind that the legislative and judicial processes may ultimately require additional changes. Employers should consider having a healthcare reform checklist to ensure they have taken the necessary steps to implement the Act.” (What Are the Implications for Employers of the Supreme Court Decision Upholding the Patient Protection and Affordable Care Act? by Duane Morris LLP)

2. Begin planning for providing minimum coverage to all employees:

“After January 1, 2014… [a] fee of $2,000 per full-time employee, excluding the first 30 employees, will be assessed on employers with more than 50 employees that do not offer coverage and have at least one full-time employee who receives a premium tax credit. Employers with more than 50 employees that offer coverage but have at least one full-time employee receiving a premium tax credit will pay the lesser of $3,000 for each employee receiving a premium credit or $2,000 for each full-time employee, excluding the first 30 employees.” (Supreme Court Narrowly Upholds Health Reform Law but Limits Congress’ Authority Over States; Ruling Lessens Uncertainty, but Many Companies Will Face Increased Regulation and Costs by Skadden, Arps, Slate, Meagher & Flom LLP)

3. Finalize the Summary of Benefits and Coverage:

“Insurers and plan sponsors of self-funded plans must provide summary of benefits to all participants and applicants, based on format set by Secretary, using uniform definitions and stating whether the plan provides minimum essential coverage and whether ensures the plan’s share of costs is at least 60 percent of actuarial value.” (The Supreme Court Upholds the Patient Protection and Affordable Care Act: Now What? by Fox Rothschild)

4. Start reporting health care costs on employee W-2s:

“Beginning with the 2012 W-2 forms to be distributed by employers in 2013, many employers will be required to report the total cost of any group health plan coverage that was provided to an employee. This cost is not taxable – it is simply an informational item on the W-2. But ensuring compliance with this new requirement will likely require a lot of coordination between an employer’s HR and payroll departments. Ensure that you are adequately planning for this new requirement now, as it will be quite difficult to gather all of the necessary information and program payroll systems after the end of year and still be in a position to distribute W-2s in a timely manner.” (Supreme Court Upholds Healthcare Reform – It’s Time for Employers To Get To Work by Fisher & Phillips LLP)

5. Prepare to make “Minimum Loss Ratio” rebates:

“Rebates will be received by many plans from insurers pursuant to the ‘minimum loss ratio’ (‘MLR’) rules and those rebates are due on or before August 1, 2012. Sponsors of those plans have a fiduciary responsibility under ERISA to ensure that a portion of the rebate (proportionate with the amount of employee contributions toward the total premiums) is treated as plan assets, and thus would be for the benefit of plan participants.” (Supreme Court Upholds Health Reform as a Constitutional Tax: What Individuals and Businesses Need to Know Going Forward by Trenam Kemker)

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