Health Care Reform

The Pension Protection and Affordable Care Act (PPACA), aka health care reform, aka Obamacare, has now been upheld in all relevant parts for businesses by the Supreme Court.

Did you know? The PPACA does not simply mandate that all Americans obtain health insurance or pay a penalty, despite this mandate being the most scrutinized and controversial portion of the statute. The PPACA enacts over 90 different sweeping changes to healthcare, introducing new regulations to individuals, states, and businesses.

Central to the mandate that all Americans obtain health insurance is a provision requiring many employers to offer minimum health coverage to their employees. While minimum coverage has not yet been defined by the regulations, depending on the number of employees in a given business, we know currently that the types of coverage requirements will be different. Our firm predicts that many businesses will have to increase the minimum coverage they currently offer, which will likely increase healthcare costs.

The PPACA also implements a wider definition of which employees must be offered health coverage. This change will likely require affected employers to offer healthcare to more of their employees than before, further increasing costs.

Finally, waiting periods have been shortened under the PPACA, which entails that coverage must be offered sooner to employees, increasing costs of healthcare for businesses once more.

The Ratliff Law Firm has designed unique solutions to provide businesses the tools they need to mitigate these increasing costs and maintain a healthy balance sheet in light of the PPACA. Further, this is not “election sensitive” planning; it does not matter if Obama, Romney, or an unknown candidate is elected President on the issue of healthcare because of pressures from other branches of government and the populous to enforce PPACA. A company’s HR department must be prepared for when PPACA is to take effect, and further to work with a competent benefits attorney to perhaps reposition certain policies, procedures, and even modify or create special purpose entities to comply with PPACA.

Furthermore, extensive changes have been made to the reporting, disclosure, and notification requirements of health and welfare administration. Claims procedures have also been regulated and are required to both provide claimants with greater information than before and introduce internal and external reviews of health claims. Compliance with these provisions will be of utmost importance as these provisions go into effect, necessitating planning with a benefits attorney and implementation of these changes.

Finally, some “Cadillac” plans, or certain high value insurance plans for executives, will be subject to an excise tax of 40% in 2018. Preparing for and creating new solutions to avoid this extremely unattractive excise will be key to the satisfaction and retention of executives who currently benefit or will benefit from these arrangements. The Ratliff Law Firm has already designed workarounds to deal with this looming challenge.