Originally posted by Stephen Miller on June 26, 2015 on shrm.org.

In what many are viewing as an anticlimax, the U.S. Supreme Court’s June 25 ruling in King v. Burwell left the status quo in place regarding the Affordable Care Act’s (ACA’s) tax-credit subsidies for individual “marketplace” coverage and, indirectly, the employer mandate to provide group health care coverage. Under the ACA, employer penalties are triggered when employees receive insurance tax credits because their employer-provided plan failed to meet ACA coverage specifications.

But health care policy wonks are pointing out what should have been obvious, though it is a lesson that some plan sponsors may have forgotten: As long as the law is the law, it’s the law. In other words, some might wish that the courts, Congress or a future administration will alter or rescind the statute. But unless and until that happens, employers should take all necessary steps to maintain compliance with the ACA’s coverage and reporting requirements—and not delay doing so in the hopes of a last-minute penalty reprieve.

Ruling’s Impact for Employers

In an online commentary posted the day of the ruling, Timothy G. Verrall and Hera S. Arsen, attorneys with law firm Ogletree Deakins, explained that:

Importantly, the Court’s decision does not alter employer responsibilities under the ACA’s “employer mandate” and its related tax reporting obligations. Since the enforcement mechanism behind the employer mandate—tax penalties under Code Section 4980H—are premised on the availability of tax-credit subsidies for exchange coverage, had the Court rejected the IRS’s approach, the “teeth” of the employer mandate would have effectively been removed in the majority of states where federal exchanges operate. However, the Court’s decision affirms the IRS’s regulatory approach, thereby preserving the employer mandate as well.

“This court’s decision confirms the advice we have given since the Affordable Care Act was adopted,” added Joel A. Daniel, the practice group leader for Ogletree Deakin’s employee benefits practice, in the same commentary. “Employers should plan their compliance strategies based on the assumption that the act and the regulations issued under it are here to stay.”

In a similar vein, Shawn Jenkins, CEO of benefits management and administration firm Benefitfocus, commented that the ruling “is another strong indication that ACA is here to stay. The result is more clarity for employers and carriers as to the stability of ACA allowing them to move confidently forward in their benefits planning.”

Driving the point home, the takeaway highlighted in an analysis of the decision by consultancy PricewaterhouseCoopers confirmed that “full on implementation of the ACA may now proceed,” adding:

Employers and insurers are facing the ACA mandates and associated reporting, and must be diligent to gather all the required information and implement the processes and procedures to comply with these requirements and provide the annual forms to individuals and the IRS next January. Planning to avoid the employer mandate penalties, as well as the 2018 tax on high cost plans, will occupy the attention of tax professionals, HR administrators and payroll departments, as well as internal audit and finance.

Many HR benefit managers will consider that an understatement.

Options for Small Businesses

Maintaining the status quo doesn’t imply there will be no other ramifications from the ruling beyond affirming the need for vigilant compliance, but the effects will likely be most pronounced on firms that are not subject to the ACA’s “shared responsibility” mandate to provide health coverage.

By upholding premium tax credits to individual policyholders for health care purchased through the ACA’s public exchanges, including the federal Healthcare.gov marketplace, the King ruling makes it more likely that small employers not subject to the coverage mandate (those with fewer than 50 full-time employees or part-time equivalents) will shift away from group coverage.

“Small business owners, who are most affected by increasing premiums, now have the certainty needed to help transition themselves and employees to the individual market, which we expect to increase to more than 100 million by 2025,” predicted Zane Benefits, which helps small businesses reimburse employees for individual health insurance plans. “We expect small businesses [not subject to the employer mandate] to continue to offer health benefits to employees in the form of monthly allowances (or ‘stipends’)” in lieu of providing group health coverage.

Not the End of the Story

While it should not deter employers from complying with the act, there could still be some rather significant fixes and adjustments made to the ACA. “Knowing that the ACA will be upheld, one would expect Congress to get more aggressive in working to improve it rather than rescind it,” said Jenkins.

Congress is already moving to pass and send revisions of the law to the president (which he, of course, may veto). These include, as Zane Benefits pointed out, measures to simplify the overly complex employer IRS reporting requirements, and to change the definition of a full-time employee to 40 hours per week (versus the current 30), while at the same time adjusting the definition of large employers to only include employers with 100 or more employees.

Similarly, the ERISA Industry Committee (ERIC), representing benefit plan sponsors, issued a statement contending that while the Supreme Court had removed a source of potential uncertainty with its decision, much legislative work is still needed to fix the underlying law.

“With the legal case settled, Congress should use this opportunity to repeal the burdensome and unnecessary taxes, mandates and reporting requirements imposed by the ACA,” said Annette Guarisco Fildes, president and CEO of ERIC. “Specifically, we want Congress to repeal the 40 percent health care excise tax, the employer mandate and all the related reporting requirements.”

The Society for Human Resource Management (SHRM) also took note that “While [the tax-credit subsidy] provision of the statute remains intact, other challenges in the ACA remain for employers. SHRM pledges to work with policymakers to address these challenges, including the definition of a full-time employee, the pending excise tax on high-value health care plans, and employer flexibility in offering wellness programs.”

Adding to the litany, the Business Roundtable, representing corporate CEOs, released a statement saying that “Moving forward, we believe Congress and the administration should address the problems that still accompany the Affordable Care Act, such as the medical device tax, insurance tax, pharmaceutical tax and the complexity of complying with the regulatory requirements.”

So while the Supreme Court’s ruling ends a frontal assault on the act that could have undermined the foundation on which employer penalties rest, legislative skirmishes will continue. But that’s no excuse for employers not complying with the ACA as it currently stands.