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November 28, 2011

HRB 41 - More ACA Updates

Released November 28, 2011I Download as a PDF

November 28, 2011 -- 

Supreme Court to Ponder Health Care Reform Law

The Supreme Court of the United States has decided to review four questions of law deriving from the health care reform law (the Patient Protection and Affordable Care Act, referenced as the Affordable Care Act or "ACA"). The questions that the Supreme Court will consider are as follows:

  1. Constitutionality. Is the individual mandate (the requirement that most Americans maintain minimum essential coverage or be subject to a tax) constitutional? Or, did Congress exceed its authority by imposing the individual mandate? Specifically the Court will be looking at whether the individual mandate violates the Commerce clause of the US Constitution.

  2. Medicaid Expansion. Is the expansion of Medicaid impermissible? Medicaid is the state-run health program for the poor and indigent. It is funded in part by the federal government and in part by the states. The ACA will require states to allow people to be eligible for Medicaid if the individual’s income falls below 133% of the federal poverty level, and if a state fails to expand Medicaid in this manner, federal funding would be lost.

  3. Anti-injunction. Is there a cause of action that can be reviewed at this point; or, must the matters be delayed until 2014 and beyond, at which point, the individual mandate will have taken effect, and individuals may have been subjected to a tax, and the Medicaid expansion will have occurred? In other words, at this point, is it necessary to punt until someone is actually harmed by the law?

  4. Severability. Can certain aspects of the ACA, specifically, the individual mandate and the Medicaid expansion, be severed from the rest of the law; or, are these aspects of the law so integratively intertwined with the rest of the law that the law must stand or fall in its totality? In other words, can certain aspects of the ACA be overturned while other aspects remain standing?

It is anticipated that the Supreme Court will hear these arguments in the early spring of 2012. The Supreme Court has allocated 5 to 5.5 hours for these arguments. A decision is expected next summer.

Summary of Benefits and Coverage: Required When?

The governing Agencies issued proposed regulations addressing the summary of benefits and coverage (SBC) on August 22, 2011 (see Proposals on Exchanges, Premium Assistance and Uniform Benefit Summary). A plan is not obligated to comply with the SBC rules until these regulations are finalized. The Agencies posted an FAQ last week affirming this position. It is anticipated that the Departments’ final regulations, once issued, will include an applicability date that gives group health plans and health insurance issuers sufficient time to comply.

New Health Finder Tool for Small Employers

HHS has established a new web-based tool that can be used by small businesses to compare locally available health plan coverages and costs. The tool (http://finder.healthcare.gov/) provides information about an estimated 2,700 plans available from over 530 insurers.

Once a small business enters its state of domicile and zip code, the type of data returned includes:

  1. Average cost and out-of-pocket limits per worker;

  2. Deductibles and range of co-pays and benefits associated with coverage; and

  3. Optional coverages available such as compatible HSA plans, or other add-on options, such as maternity benefits, mental health services, and prescription drugs.


About the Author: Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law. Ms. McLeese is based in the CBIZ Leawood, Kansas office.


The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation.

The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations.

This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

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