Now that the Supreme Court has upheld the Affordable Care Act (ACA), it’s time to weigh the strategic impact on your organization. Take these five steps to clarify decisions you need to make between now and 2014.
1. Review the Supreme Court decision to determine how it will affect your organization. Get your attorney’s help.
Odds are, the ACA is here to stay in some form. Congress could vote to gut the law, but that’s highly unlikely anytime soon. Even if the November election gives anti-ACA Republicans control of the House, Senate and the White House, it would be a mistake to count on a repeal effort to succeed. Reason: Unless Republicans hold at least 60 Senate seats, Democrats would be able to block repeal legislation.
2. Assess the strategic impact of continuing or dropping health benefits. The ACA does allow many employers to decline to offer health coverage, although they’ll have to pay stiff penalties if they do. But would those be your only costs? How might your benefits decisions affect efforts to recruit, retain and develop your workforce? Would offering (or dropping) health coverage give you a competitive advantage?
3. Determine whether to retain “grandfathered” status if you decide to continue offering a health plan. Group health plans that were in effect when the ACA was signed on March 23, 2010, can keep grandfathered status if they keep the same insurance carrier, and employees’ out-of-pocket costs don’t increase substantially. That has advantages—grandfathered plans are exempt from complying with some ACA requirements. However, the exemption alone shouldn’t drive your decision-making. Learn more about grandfathered status at "The New Health Care Reform Law."
4. Determine if your existing plan meets qualifying standards for eligibility and affordability. You’ll need help to make that call, probably from your insurance carrier or broker. Running 906 pages in its final form, the ACA is a complicated law. Insurance professionals have been keeping abreast of compliance standards all along. Tap their expertise.
5. Calculate the true costs of either offering or not offering health coverage after 2013. It’s not a simple exercise. Among the factors to consider:
- Projected growth of the employer-paid portion of premiums
- Size of your workforce, and the likely number of insureds
- Administrative costs associated with running your plan
- The penalty hit you will take if you decide to drop coverage and have employees seek health insurance through state exchanges.
They’re all part of the equation every employer will have to balance: Is it more cost-effective and business-savvy to continue offering employer-paid coverage or let employees fend for themselves in the health insurance marketplace?