Since the U.S. Supreme Court decision validating the Affordable Care Act was handed down in June of 2012, most large employers have been in a wait-and-see mode to allow time for the complete ramifications of the new law to emerge. However, making that process even more difficult is the administration's tendency to constantly shift the ACA's deadlines and requirements, treating the law as more of a general permission to change the U.S. health care system at will than a set of legal requirements binding everyone, including the government. The federal government is months, if not years, away from resolving its IT problems, and we won't know until early this summer or the end of 2014 the full extent to which the individual and smaller employer markets have been disrupted by the ACA. A large number of small and mid-sized businesses accelerated their annual renewal cycles into 2013 to avoid even larger sticker shocks in 2014, and with those policies ending next fall, millions of Americans could see the end of their employer-provided coverage right around the midterm elections. At some point later this year or early next, it is our sense that for large employers the time for waiting to see how the ACA shakes out will be over, and the pressure will be on them to figure out the next generation of health care delivery systems. Some more daring employers are moving to private exchanges for 2014, but the combination of outstanding legal issues and questionable value propositions has most employers remaining in a study mode. From an HR Policy staff perspective, as part of this review process, we believe it is incumbent on all HR Policy members in the immediate term to figure out the additional costs that will be generated by the ACA so that we are in a position to work together to figure out what those next generation systems might be.
Full Regulatory Agenda A number of final and proposed rules involving several important employer-related issues are likely to be published in 2014, including:
- Substantial IRS reporting requirements;
- Final employer penalty rule;
- Definitions of full-time and seasonal employees;
- 2014 and 2015 transitional reinsurance fees;
- Non-discrimination rules for fully insured plans; and
- Auto enrollment rules for large employers.
The EEOC may also proceed with guidance or rulemaking on wellness programs and when an incentive to participate in such programs violates the ADA.
Legislation Likely on Hold At the federal level, the good news for large employers is that there seems to be a shift among Republicans with regard to their primary health care focus, moving from outright repeal of the ACA to consideration of various improvements to the health care marketplace. However, it still appears that any significant amendments to the Affordable Care Act will not occur until after President Obama has left office; in the meantime, the administration will likely change the law through regulatory policy to keep ahead of Congress taking more substantive action. All this means the employer community has three years to figure out what type of legislative and regulatory structure it needs in order to create a more sustainable and stable health care delivery system than what is in place today. At the state level, governors may continue to lose patience with the gridlocked federal government and strike out on their own to create more sustainable systems in their states. While that would generate innovations, it may cause havoc for multi-state self-insured employers.
In sum, the health care system in America is undergoing a major transformation, and the subject will likely be at the top of every CHRO's list of priority issues for years to come.
