© Copyright ClearPath Benefits

PPACA Ruling Answers Some Questions, Leaves Others Hanging

The wait is over — sort of.

Companies that had been delaying action on the Patient Protection and Affordable Care Act (PPACA) should now start making plans to comply, experts say. Yet while the Supreme Court’s 5-4 ruling in June preserved the law, the full impact of PPACA’s regulations remains to be seen.

For now, employers should prepare to meet the most immediate requirements, according to the law firm Morgan Lewis. In a recent web posting, the firm notes that companies should pay attention to the provisions that apply in 2012 and 2013, including:

  • Reporting medical coverage value on 2012 W-2s
  • Preparing to receive and properly distribute any medical loss ratio rebates
  • Preparing to provide a summary of benefits and coverage in their 2013 enrollment packet
  • Finishing updates to their summary plan description for any plan design changes from PPACA in 2011 and 2012
  • Implementing an annual $2,500 cap on health care spending account contributions (beginning with 2013 plan years)
  • Preparing for the patient-centered outcomes fee due in July 2013 ($1 per covered life for 2012. Insurers will remit the fee for fully insured plans; self-insured plans will pay it directly.)

Some other requirements, however, are far from crystal clear, according to a report in Business Insurance. For instance, the “pay or play” provision in the law requires employers with 50 or more workers that don’t offer coverage to full-time employees to pay a penalty of $2,000 per worker. But the government has yet to clarify if the full fee would apply if employers mistakenly misclassify employees. Current regulations also fail to explain how the law applies to employees whose hours fluctuate weekly or monthly.

The IRS and other agencies are expected to release more guidance in the coming months, which should clear up some questions for employers. Yet the federal government itself and many states likely won’t be able to meet all the deadlines on actions required to actually implement many of the major provisions, which start in 2014, according to Kaiser Health News.

The biggest stumbling block will be setting up the health care exchanges — online marketplaces where some businesses and consumers will shop for coverage.

“Except in a few states, it’s impossible to do this in the time allowed — it’s going to have to slip,” said Joseph Antos of the American Enterprise Institute in the KHN report.

Even if some states are able to establish exchanges on time, the federal government’s exchange — which states can opt to use instead of creating their own — likely won’t be up and running anytime soon, said Cheryl Smith of Leavitt Partners.

“The 2014 start is untenable for federally compliant exchanges,” Smith told KHN. “They have to verify income, they have to verify residency, they have to verify citizenship, and do all that through different federal agencies. Before [federal subsidies] can flow, every one of those things has to be done.”

Some experts say that, barring a major political change in Washington, employers will be coping with PPACA in the years to come. Still, nothing can be ruled out until after the November elections, others note.

“Other chapters in the political front [regarding PPACA] have yet to be written,” Dave Guilmette of Cigna Corp. told Business Insurance.