Impact Of Supreme Court Affordable Care Act Decision On Group Health Plan Sponsors

Author:Ms Liza Hecht, David P. Doyle, Kathy A. Lawler and Anubhav Gogna
Profession:Day Pitney LLP

Originally published on the Employer's Law Blog

In a 5-to-4 decision yesterday, the United States Supreme Court upheld President Barack Obama's signature legislation on healthcare reform, the Patient Protection and Affordable Care Act ("PPACA").

What does this mean for plan sponsors?

As a result of this decision, plan sponsors must continue to administer their group health plans to comply with PPACA. Outlined below are the PPACA requirements that require plan sponsor action now, because they are effective either this year or early in 2013, as well as recommended action steps:

Action Needed Now

Summary of Benefits and Coverage ("SBC") - Plan sponsors of group health plans will be required to provide an SBC to all participants and beneficiaries enrolling or re-enrolling during open enrollment this year if the first date of their open enrollment period is on or after September 23, 2012. Plan sponsors that do not offer open enrollment or that permit certain individuals, such as new hires, to enroll outside an open enrollment period will be required to provide an SBC to all participants on the first day of the plan year after September 23, 2012 (for most plan sponsors this means January 1, 2013). Employers should have legal counsel review the SBC before it is distributed to participants and beneficiaries even if the employer is not drafting the SBC (i.e., it is being prepared by insurance providers for employers with insured group health plans or third-party administrators for employers with self-insured group health plans). In addition, employers that plan to distribute the SBC electronically should make sure that they are in compliance with the electronic delivery rules. Form W-2 Reporting - Employers will be required to report the total cost of employer-sponsored health coverage on Forms W-2 for the 2012 calendar year. However, there is currently an exception for small employers (those that were required to file fewer than 250 Forms W-2 for 2011). Employers who think they may fit within the small employer exception should confirm they satisfy the small employer exception requirements. In addition, employers should consult with legal counsel to determine the plans that must be included and the available methods to calculate the aggregate cost that will be reported on Form W-2. Comparative Effectiveness Fee - Insurers and plan sponsors of self-insured group health plans for plan years ending after September 30, 2012, and before October...

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