Preparing for the SCOTUS ruling
By Brian M. Kalish
June 18, 2012
Industry groups are being proactive in preparing their membership for the Supreme Court’s ruling on health care reform — which is expected at any time — as they know no matter the ruling, the business has changed forever.
At the National Association of Health Underwriters they have readied their membership by covering the topic across numerous mediums, including weekly e-newsletters, town halls and web seminars, says Jessica Waltman, NAHU’s SVP of government affairs.
After the decision comes out, NAHU members will want to know what will happen, Waltman says, adding she believes the ruling may come out during the organization’s annual convention, which begins June 24 in Las Vegas, so they are making plans to have plenty of time to discuss it.
“We need to inform our membership, so we have a variety of information tools that we are preparing that cover the eventualities as far as we can see them,” she says. “We believe no matter the ruling; [our] members will start receiving calls from their clients. … Our goal is to have tools at the ready so they can best assist their clients.”
The Council of Insurance Agents & Brokers is taking a similar approach, and has already had discussions with its membership about the potential impact of the ruling, says Scott Sinder, partner, Steptoe & Johnson LLP, and The Council’s general counsel.
The Council and its attorneys at Steptoe & Johnson LLP “have folks anxiously awaiting and ready to read the opinions,” and the organization intends to send notice to its members within hours of the ruling that reports on “the big picture,” which will be followed up with more in depth analysis within 24-28 hours.
A series of web seminars, including an initial one for its membership and a second one for members to share with their clients, will follow.
One broker, who says he started his business expecting health care reform, says he’s enjoyed watching the buildup to the ruling. “In the last three to four months it’s been interesting to see brokers still holding onto that hope that we’re going to go back five or six years and broker commissions will go back up and we’re not going to have government involvement in health care. But I don’t see that scenario occurring,” says Reid Rasmussen, owner of Benefit Brainstorm, Inc, adding he believes 30% of brokers will leave the business in the next two years.
“That will open opportunity up to the insurance professionals that are still left figure out how to better serve their clients,” he says. “Smart agents are expanding their horizons and serving their client better than ever before. … It’s not going to make a difference in the end what the Supreme Court rules.”
Even so, Waltman says, NAHU cannot wait for the ruling to come out, as presently “it’s very difficult to plan anything and it affects a lot of our dealings [and] feelings. … It affects everything we are doing.”
“Just having the closure will be very helpful,” she adds. “I think we are looking for that and then we can plan accordingly. No matter what the Court does … there needs to be changes to market reform in the coming year.”
OVERNIGHT HEALTH: Still waiting for SCOTUS
06/18/12
Source: thehill.com
By Sam Baker and Elise Viebeck
The Supreme Court’s landmark healthcare ruling is just days away. More than 10,000 users tuned in for live updates Monday morning at SCOTUSblog but, as expected, the court didn’t release its highly anticipated healthcare ruling. The next possibility is Thursday, though the odds still seem to favor a ruling next week.
As the decision nears, focus is turning once again to the important issue of severability — whether the healthcare reform law’s individual mandate would have to take the whole law down with it, if it’s found to be unconstitutional. The justices can do just about anything they want on the severability question: strike down the whole law; strike out only the mandate; or strike the mandate and certain other provisions.
Any decision is sure to stir up a partisan firestorm, but a new poll released Monday indicates that the firestorm might be a bit softer if the court only strikes the mandate. In a new poll from the Pew Center for People and the Press, 43 percent of Republicans said they’d be happy with a decision striking down just the mandate, while 47 percent said they’d be unhappy. Among Democrats, 56 percent said they’d be unhappy losing just the mandate — a majority, sure, but smaller than the 74 percent who said they’d be unhappy if the court strikes down the entire law.
IRS Provides Guidance on Health FSA $2,500 Limits
In a recent Notice, the IRS provided guidance on the effective date of the $2,500 limit on salary reduction contributions to health flexible spending arrangements (“Health FSAs”) and on when plans should be amended to comply with the limit
Background. Under the Patient Protection and Affordable Care Act (“PPACA” or “Health Care Reform”), the annual contributions permitted for an employee under the Health FSA component of a Cafeteria Plan will be capped at $2,500. This is effective for “taxable years” beginning after Dec. 31, 2012.
New guidance. Notice 2012-40 provides the following guidance and clarifications regarding the $2,500 limit.
- The $2,500 limit does not apply for plan years that begin before 2013.
- The term “taxable year” refers to the plan year of the cafeteria plan (and not the tax year of the employee or employer). This means the period for which salary reduction elections are made.
- If a cafeteria plan has a short plan year beginning after 2012, the $2,500 limit must be prorated accordingly.
- The $2,500 Health FSA cap does not apply to any other “flex credit” offered under a Cafeteria Plan (such as dependent care assistance).
- Plans may adopt the required amendments to reflect the $2,500 limit at any time through the end of calendar year 2014, provided that they otherwise operate in accordance with the new limit requirements.
- In the case of a plan providing the optional grace period, unused salary reduction contributions to the health FSA for plan years beginning in 2012 or later that are carried over into the grace period for that plan year will not count against the $2,500 limit for the subsequent plan year.
- If one or more employees are erroneously allowed to elect a salary reduction exceeding the Health FSA limit, the Cafeteria Plan will not lose its qualified status if: (1) the terms of the Plan apply uniformly to all participants, (2) the error was a reasonable mistake and not due to willful neglect, and (3) the excess amount is paid to the employee and treated as taxable wages.
How Supreme Court Could Rule on ACA
The Supreme Court is expected to hand down a decision this month on Preisdent Obama's health reform law, which is called the Affordable Care Act by Democrats and Obamacare by Republicans. There are several different questions before the court, including when to decide, whether an individual mandate is constitutional, and whether the Congress can force states to expand Medicaid by placeing restrictions on federal funds.
Employers Confident Affordable Care Act Will Continue
JUNE 14, 2012
85 Percent of Employers Surveyed Are Continuing with Compliance Plans, Including SBC Deadline, Confident ACA Regs for the Most Part Will Continue.
BOSTON--(BUSINESS WIRE)--As the Supreme Court decides the fate of the Affordable Care Act, employers surveyed by HighRoads, the industry leader in employer health care compliance and benefits management, appear confident ACA will continue, and some 85 percent are moving forward to meet compliance deadlines, including the September 23, 2012, deadline for enactment of the new Summary of Benefits Coverage (SBC) regulation. The exception is the mandate for individual coverage—slightly more than half of the respondents said the ACA will be upheld but the individual mandate is likely to be struck down when the Supreme Court rules in late June.
“They will most certainly want to know the rationale behind any changes to their benefits, especially since so many of the ACA’s changes to date have been perceived by employees as positive, including extending coverage to adult children, 100 percent coverage of preventive care and the elimination of lifetime limits.”
In other findings, 32 percent of respondents think the law will stand as is, and the remaining 14 percent felt the Court would strike down the entire law. Respondents ranged in size from fewer than 5,000 employees to more than 100,000 employees. The majority of respondents have more than 5,000 employees.
“Employers know there is no time to play catch up in order to meet SBC requirements for September. They are strategically planning and executing on compliance regulations, realizing the complexity of meeting ACA regulations, if the law remains partially, or even entirely intact,” said Kim Buckey, Principal, HighRoads Compliance Communications Practice.
While the vast majority is moving forward with their planning and compliance initiatives, five percent of respondents reported that they were waiting to make a decision about how to handle SBCs until after the Supreme Court has ruled. Not surprisingly, these respondents tended to have fewer employees—and fewer plan options—than the rest of the responding organizations. The remaining ten percent were evenly split between postponing finalization of their plan designs for 2013 and postponing their pay or play analysis (which would have more impact in 2014—but would certainly require laying the groundwork with employees over the course of the next 12-18 months).
“It’s prudent for employers to plan for continued enactment of the ACA since it is likely that at least some of the key provisions of the law will be upheld. Planning will ensure that employers remain in compliance with the regulations that are already in effect during 2012, and lay a more solid groundwork for any regulations that will come into effect, in full force, by 2014,” said Thomas Barker, partner in the Foley Hoag law firm.
Distressingly, 55 percent of respondents had no plans to communicate anything to employees about the company’s position on the ACA, or the company’s plans if the ACA is overturned. Thirty nine percent had not yet communicated but did plan to do so, and 6 percent had already communicated to employees.
“We would encourage employers to take another look at their ACA communication plans and where it fits within their overall HR and benefits communication strategy. The ACA remains a rather large question mark in employees’ minds, and they will naturally look to their employers—who provide their benefits—for information about how the Act and any changes to it, will affect them. As we look ahead to the fall open enrollment season providing employees a status check on where the company stands in relation to the ACA will give employees a better foundation from which to choose or revise their individual plans,” said Buckey. “They will most certainly want to know the rationale behind any changes to their benefits, especially since so many of the ACA’s changes to date have been perceived by employees as positive, including extending coverage to adult children, 100 percent coverage of preventive care and the elimination of lifetime limits.”