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Legal Alert

Supreme Court Upholds Healthcare Reform - It's Time for Employers To Get To Work


Today the U.S. Supreme Court issued its long-awaited decision on the Patient Protection and Affordable Care Act (ACA). In what is easily the most significant decision this term, and arguably one of the most important rulings in decades, the Supreme Court upheld the so-called "individual mandate" and all of the provisions of ACA that impact employers. NFIB v. Kathleen Sibelius, Secretary of Health and Human Services.

While the political impact of this ruling may be far from certain, the impact on employers is clear – it's time to get to work. Anticipating that the Supreme Court would invalidate much or all of ACA, many employers have been sitting on the sidelines and putting off investing much time or energy into analyzing how healthcare reform will impact their businesses. Now that the uncertainty has been lifted, it is time for employers to focus on the many healthcare reform compliance obligations and possible economic impacts.

"Big Ticket" Items for Employers
Of all the employer obligations in ACA, those that are likely to have the most significant impact on plan design and costs will become effective in 2014 or shortly thereafter:

While the obligations described above will not be effective for at least 18 months, employers need to start evaluating the impacts as soon as possible in order to adequately plan for additional economic burdens and consider strategic plan design changes.

Immediate Compliance Issues
In addition to the "big ticket" economic and strategic issues discussed above, there are numerous compliance issues that will require your immediate attention:

The compliance obligations discussed above are just a sample of the additional burdens that employers will need to address in order to satisfy their healthcare reform obligations.

Going Forward
The cost of maintaining a health plan will likely go up. You will have to examine the portion of employee cost that you are paying currently in light of employees' pay to determine whether you will be in compliance with the play or pay mandate and anticipate the additional cost of the automatic enrollment requirement. The cost of compliance with ACA will be reflected in increased administration fees and premiums, as well.Also, you should consider that your employees will have many questions about how all of this impacts them, so you need to be prepared to address those questions.

As you can see, this decision has far-reaching – and possibly expensive – implications for employers. To explain the requirements in more detail, Fisher Phillips presented a free webinar.

This Alert provides an overview of a specific Supreme Court ruling. It is not intended to be, and should not be construed as, legal advice for any particular fact situation.

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