Obamacare: What the Supreme Court Decision Means for RI Companies
Monday, July 02, 2012
Last week, the US Supreme Court upheld the individual mandate – which requires Americans to buy health insurance or pay a tax – and, by extension, most of the rest of the Patient Protection and Affordable Care Act (PPACA). What does the decision mean for companies in Rhode Island?
Employers need to move forward with implementing the changes required by the law. The most immediate requirements are:
SBCs
All group health plans, regardless of size, must provide "summaries of benefits coverage" (SBCs) with the first open enrollment beginning on or after Sept. 23, 2012. The content and format of the SBCs must meet strict guidelines, and the penalties for not providing them are high (up to $1,000 per failure). Insurers will be expected to provide the SBCs for fully insured plans, while self-funded plans will be responsible for preparing their own.
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Employers who issued 250 or more W-2s in 2011 must report the total value of each employee's medical coverage on their 2012 W-2s that they’ll issue in January 2013.
Medicare Tax
High income taxpayers (those with more than $250,000 in wages if married and filing jointly, or more than $200,00 if single) must pay additional Medicare tax, and employers will be responsible for deducting a part of the tax (an additional 0.9 percent on the employee's wages in excess of $200,000) from the employee's pay beginning in 2013.
FSA Limits
Beginning with the 2013 plan year, the maximum employee contribution to a health flexible spending account (FSA) will be $2,500.
Patient Centered Outcomes
The Patient Centered Outcomes fee (also called the comparative effectiveness fee), which is $1 per covered life for the 2012 year, is due July 31, 2013. Insurers will remit the fee on behalf of the plans they cover, while self-funded plans must pay the fee directly.
Future Implications
While House Republications have pledged to repeal PPACA, a bill would not pass the Senate. And even though the fall election could result in a change in control of Congress and re-energize repeal efforts, employers need to understand what’s required of them, today.
Amy Gallagher has over 19 years of healthcare industry experience. As Vice President at Cornerstone Group, she advises large employers on long-term cost-containment strategies, consumer-driven solutions and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, is a member of local organizations like the Rhode Island Business Group on Health, HRM-RI, SHRM, WELCOA, and the Rhode Island Business Healthcare Advisory Council, and participates in the Lieutenant Governor’s Health Benefits Exchange work group of the Health Care Reform Commission.
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