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The Supreme Court's health care ruling sends a clear message—review your plans and seize this opportunity to create better strategies
On June 28, 2012, by a narrow 5-4 decision, the Supreme Court of the United States upheld the constitutionality of thePatient Protection and Affordable Care Act (PPACA)on the grounds that the individual mandate penalty is a tax. Because the Constitution clearly gives Congress the ability to impose a tax, the Court ruled, all of the other questions surrounding the mandate are moot.In writing for the majority in National Federation of Independent Business vs. Sebelius, Chief Justice John Roberts stated that, "The Affordable Care Act's requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness." Chief Justice Roberts was joined in the majority decision by Justices Stephen Breyer, Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan.While the individual mandate was deemed by a majority of the Court to violate the Commerce Clause and the Necessary and Proper Clause of the Constitution, it was ruled constitutional because Congress has the authority to impose a tax on individuals who go without insurance. (The entire 193-page Supreme Court decision can be read here.)
Moving Forward: What to Do Now
The ruling is clearly not the end of the debate over health care reform, but rather only the first act. U.S. health costs are projected to be significantly higher than the rest of the developed world, while health outcomes in the U.S. trail other industrialized nations —often badly. Providing expanded coverage, increasing the health status of our citizens, and better controlling costs are all goals that, while addressed in the PPACA, have a long way to go.The ruling sends a clear message—organizations need to review their plans and seize this opportunity to create better strategies around their health plans, both in design and employee communication.
For human resource professionals, the message here is very clear—move forward with implementing and complying with PPACA, since major portions of it take effect in 2014 (a mere 18 months away) and other provisions take effect later this year and in 2013. For example, many employers soon will be required to report the value of employer coverage on IRS Form W-2, and all employers must issue a summary of benefits and coverages. Employers who were waiting to begin planning on how to comply (or whether to even offer or continue to offer health coverage) need to begin performing quantitative and qualitative analyses on their plans. More importantly, they need to begin looking at their health plans as part of an overall HR strategy for their organizations.Key steps employers need to take NOW to plan for 2014:
For the HR professional, this is a golden opportunity to reassert the strategic contribution of HR as it impacts an organization's ability to attract and retain the right talent. Further, it is perhaps a once-in-a-lifetime chance to position and communicate the value of the organization's total rewards strategy.Gary B. Kushner, SPHR, CBP, is president and CEO of Kushner & Company. He is a frequent presenter at SHRM conferences, a former SHRM board member and a former chair of the HR Certification Institute who has testified in front of the U.S. Congress on benefits and health care issues.
Webcasts Available for SHRM Members
The Society for Human Resource Management (SHRM) has made available two webcasts on the Supreme Court's decision: one on-demand program available now offering a brief overview of the ruling and its impact on employers' health coverage practices; and a second, more in-depth live session scheduled for July 11, 2012, exploring employers' obligations under the health care law.
ON-DEMAND SESSION:The Supreme Court Has Spoken—Now What?Presenter: Gary Kushner, Kushner & CompanySHRM members may view or download via podcast a 20-minute briefing from Gary Kushner on the High Court's ruling and its impact on employers' health coverage practices. Note: This program does not qualify for HR Certification Institute recertification credit.• View or download this program here. View presentation slides here.
LIVE SESSION: Ready, Set, Go! Positioning Your Organization for Health Care ReformJuly 11, 4 p.m. ET / 1 p.m. PTPresenter:Gary Kushner, Kushner & CompanyThe Supreme Court's decision makes clear employers need to get ready for the new rules involving health care. Employers and policymakers in Washington have been delaying implementation in anticipation of the Court's decision. Now, with Health Care Reform upheld, there are important steps employers need to take for 2013 and beyond. In this 90-minute program, Gary Kushner, one of the country's leading benefits experts, will describe employers' obligations under the health care law. The program will include analysis about the type of benefits employers should offer, and whether eliminating some or even all coverage is practical. The program will outline a three-year plan that will help you ensure your benefits plans are consistent with the law.• Learn more about this program here.
Court Upholds Most of Health Care Reform Law, HR News, June 2012SHRM Will Continue to Help HR Implement Reform, News About SHRM, June 2012
SHRM Online Benefits Discipline
SHRM Online Health Care Reform Resource Page
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