Healthcare In Review

Patient Protection and Affordable Care Act (PPACA) Upheld

On June 28, 2012, the U. S. Supreme Court, in a 5-4 decision, ruled that payments required of individuals who do not maintain minimum health coverage under the “individual mandate” was not a penalty, but was a tax and allowed under the Congress’s power to tax under Article 1 of the Constitution. By determining that the mandate was a tax, the Supreme Court found the mandate was constitutional, but rejected the government’s arguments that the individual mandate was allowed under Constitution’s Commerce Clause or the Necessary and Proper Clause.

Moving Forward

Now that the courts have ruled PPACA constitutional, we are taking steps forward to make certain you know how to prepare for future compliance. Please see below for details.

The Next Steps for Employers must take to Comply

To comply with the Act in 2012 and 2013, an employer must:

1. Prepare to receive and properly distribute or apply any Medical Loss Ratio Rebate associated with 2011 insured health coverage.
2. Determine whether it must comply with the new Form W-2’s reporting requirement for 2012, distributed in January 2013 and, if so, obtain coverage health coverage information (This applies if the employer filed 250 or more Form W-2s for 2011).
3. Finalize Summary of Benefits and Coverage material for inclusion in 2013 Open Enrollment package for all enrollees
4. Complete updates to its Summary Plan Descriptions and plan documents to provide 2011 and 2012 changes.
5. Prepare for the inclusion of the $2,500 cap on salary deferral contributions in its health care flexible spending account for the 2013 plan year.
6. Determine if it is subject to the “PCOR fees,” paid by July 31, 2013 for 2012.
7. Notify its employees of the availability of health insurance exchanges by March 2013.
8. Prepare for 0.9% Medicare payroll tax increase on high income individuals for the 2013 tax year.