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What Comes Next?

Saturday, June 2, 2012
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Lots of Americans are uncomfortable with the idea of being required by law to purchase health insurance. And sometime soon -- probably later this month -- the U.S. Supreme Court will have the final word on the matter when it announces its ruling on the constitutionality of the Patient Protection and Affordable Care Act.

Should the High Court strike down the law, or significant portions of it, the nation's employers -- the entire country, in fact -- will be faced with this question: Now what? After all, while polls indicate that the PPACA's individual mandate -- requiring all adults to either purchase insurance or pay a fine -- is unpopular with the majority, other provisions, such as those dealing with preexisting conditions and allowing children to stay on their parents' health plans until age 26, are quite popular.

The problem is, these and other provisions were supposed to be "paid for" via the individual mandate -- the extra premiums insurers would receive would help underwrite the ban on pre-existing-conditions exclusions, the repeal of lifetime-limit benefits, and so forth.

Should the individual mandate be struck down but other portions of the law upheld, Congress will then be faced with the problem of deciding how to pay for those provisions.

That's a tall order, considering that the current climate in Congress makes the Kardashians look like the most functional family in America by comparison. 

What should employers do in the meantime? The advice of most consultants and experts can be summed up thusly: Stay the course.

"In the meantime, employers should proceed with plans to comply with the law," says Sharon Cunninghis, leader of Mercer's U.S. health and benefits practice. "For example, employers need to get started now on the new communication requirements that go into effect this fall, so they can't afford to wait until June to see what the Supreme Court does." 

The HR Policy Association released its own statement on the matter, noting that "for the past several months, many of our members have been forced to put strategic planning for healthcare on hold, waiting for the U.S. Supreme Court to rule on the constitutionality of the individual mandate and the outcome of the November elections.

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However, no matter which way its ruling goes, the high court's decision on the individual mandate will likely trigger a resumption of the Congressional debate over the legislation . ..."

The statement noted that the campaign of presumptive Republican presidential nominee Mitt Romney has said that on "day one" of a Romney administration, he would sign an executive order allowing all 50 states on their own to opt-out of PPACA, should it still be in existence.

Regardless of what goes on in Washington, HR will continue to be faced with the need to hold down healthcare costs without endangering employee engagement or productivity.

One approach, advocated by Mercer and Aon Hewitt, is a "defined-contribution" approach to healthcare by participating in privately run health exchanges similar to those mandated by PPACA. The thinking goes that employees will be extra-careful with their money and extra-conscious of maintaining their health and that of their families when their own dollars are on the line.

Will this approach work? It's certainly an idea worth exploring. These are, indeed, interesting times.

e-mail: amcilvaine@lrp.com

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