Health Care Reform

Health care reform and the Supreme Court decision: What happens next?

The Supreme Court decision on health care reform puts one major question to rest: the Patient Protection and Affordable Care Act is constitutional, with the exception of one mandate regarding the expansion of Medicaid.

But the historic ruling on the Patient Protection and Affordable Care Act is not the end of the national discussion on health care costs. In fact, the Court’s decision is part of a long and ongoing national conversation that is expected to continue for years to come, due to the major forces influencing today’s complex marketplace. They include:

-Continual increases in health care costs, often outpacing wages and inflation
-An aging workforce with growing health care expenses driven by increasing rates of chronic disease, as well as more people surviving serious illness
-Employees required to shoulder more responsibility for their health care and medical expenses

How do these forces impact your business?

They are driving change and innovation in the way health care is delivered and financed. And they have contributed to the financial fragility of today’s workers. As a result, employers need your help to create a benefits plan that’s cost effective yet provides the financial protection their employees need.

This financial safety net increasingly includes rounding out a benefits package with disability, accident and critical illness insurance, which offer employee-paid options that protect today’s workers from the high out-of-pocket costs of illness and injury.

Benefits that won’t trigger a “Cadillac” tax

Employers are already looking ahead to 2018 to make sure their benefits plans will not be subject to the 40% excise tax, known as the “Cadillac” tax.*

These supplemental plans are in a category of coverage known as “HIPAA-excepted” benefits,** which means they are not subject to the tax.    These benefits include:

  • Accident insurance
  • Critical illness insurance
  • Cancer insurance
  • Disability insurance
  • Life insurance

* The health care reform law calls for the Cadillac tax to be levied on health insurers for any plans that exceed standards for actuarial value set by the government. It is widely anticipated that this expense will be passed along to employers.
** HIPAA refers to the Health Insurance Portability and Accountability Act. For the purposes of health care reform, certain kinds of coverage are designated as excepted-benefits and are not subject to the Patient Protection and Affordable Care Act. The U.S. Department of Labor defines these as benefits that provide, under separate contract, certificate or contract of insurance, such as voluntary coverage that is supplemental to a group health plan.