How Healthcare Ruling Will Affect Businesses

Source: ABCnews.go.com (with some adaptations), “Health Care Ruling: Business Winners, Losers" by RICHARD DAVIES and SUSANNA KIM

After months of legal challenges, the recent healthcare ruling gives hospitals, insurance companies, biotech firms and drug makers a clearer picture of what will happen when the major provisions of the law are expected to go into effect in 2014. 

The legislation is a boon for much of the health care industry by making coverage affordable for tens of millions of uninsured Americans. But not every company will benefit. Medical equipment makers, for example, will be hit with a new tax on their sales. 

There will be new fees as well as cuts in some forms of government reimbursement to health providers. Beyond the health care industry, how will the Supreme Court ruling affect small- and medium-sized businesses? 

"For the companies that have more than 50 employees who do not currently have coverage there will be an additional charge. It will be expensive, but they've been anticipating it," said Brian Hamilton, CEO of the financial information firm Sageworks. 

The law establishes health insurance exchanges at the state level, but one of their roles is to administer subsidies offered by the federal government to households whose income is up to 400 percent of the poverty level, essentially the middle class. Thompson said health care costs in many states will increase with the new rule requiring managed care providers to insure people with pre-existing conditions. But people eligible for subsidies will see costs decrease as premiums will be based on a percentage of their income. 

Alex Morozov, Morningstar's director of health care research, said it will be "tough to speculate" how health care costs will change for consumers. "States are going to exercise significant pressure on managed care companies regarding premium increases," he said.

So what's next?

Source: hrmorning.com (with some adaptations), "What's next for employers after healthcare ruling" by Christian Schappel

This is a huge win for the Obama administration, but the political fight over the law is far from over. Republicans have said they’ll do all they can to overturn it. Mitt Romney’s even promised to undo it if elected president. So where does this leave employers now? Essentially the same position they’ve been in since the law was enacted, gearing up to comply with the law’s provisions.

A quick look at some of the health reform issues companies will be facing:

  • Companies with 50 or more workers will be subject to a penalty — in most cases, $2,000 per employee — if they do not provide health insurance coverage.

  • Employers will have to issue summaries of benefits and coverage during their first open enrollment on or after September 23, 2012.

  • Most employers will be required to report the cost of individuals’ health insurance on their 2012 W-2s.

  • Insurers will have to issue the first medical-loss ratio rebates this year.

  • Employers will need to amend their health FSAs to comply with the $2,500 limit on employee contributions by the end of 2014 plan year.

  • The state health exchanges are slated to be up and running in 2014.

  • Insurers will no longer be allowed to restrict coverage for those with pre-existing conditions starting in 2014.

  • Employers who do not offer sufficient levels of health insurance to their employees by 2014 will be forced to pay a penalty, and

  • Employers will be allowed to increase the value of the incentives they provide employees for participating in wellness programs to 30% of the cost of health coverage starting in 2014.

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Posted in: HRvest
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