Last week, by a narrow 5-4 decision, the Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act (PPACA) on the grounds that the individual mandate penalty is a tax. 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.

In writing for the majority in the National Federation of Independent Business vs. Sebelius decision, 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. The entire 193-page Supreme Court decision can be found here just in case you are having trouble sleeping and would like a non-medicated solution.

What HR Professionals and Business Owners Should Do

This ruling sends a powerful 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 HR professionals and business owners, 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. Employers who were waiting to begin planning on how to comply 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:

  1. Determine the strategic implications of whether or not to offer a plan. Health benefits are just one part of an overall total rewards strategy. How does an organization’s having (or not having) health benefits impact other talent acquisition and talent management strategies?
  2. Review the Supreme Court decision as to its impact on your organization.
  3. If your current medical plan is grandfathered, perform a qualitative analysis on whether it makes sense to remain a grandfathered plan or become non-grandfathered by examining the seven PPACA provisions that apply only to non-grandfathered plans.
  4. Perform a qualitative analysis to determine if your existing plan meets qualifying eligibility and affordability standards. In order for employers to avoid potential penalties, ensure that any health plans offered meet both standards.
  5. Determine the true organizational costs of either offering or not offering health coverage after 2013. For many organizations, this is not the “no-brainer” that it may first appear.

Starting July 15th, VISICOR will be offering a complimentary health care analysis and report. This report will provide a full quantitative and qualitative analysis and will be customized for each company/organization that requests this service. At the conclusion of this report, you will know exactly where you stand, what the risk factors are, potential exposure areas, and potential tax liabilities (employer mandate). If you are a current client of VISICOR, we will automatically provide this report to you. If you are not yet a client of VISICOR and would like us to provide this report for you, please contact us. There is no cost and no obligation for this service.