The newly enacted health care reform bill has fueled numerous questions by employers seeking direction on arguably the most important workplace decisions they will make in the next few years. Employers need to understand the issues and recognize the decision points and their ramifications.
Jean C. Hemphill and Brian M. Pinheiro have identified frequently asked questions based on weeks of presentations and discussion with legal counsel and benefits professionals across the country. If your organization needs guidance or is interested in a more in-depth analysis of the effects of health care reform on your particular benefit plans, please contact us.
As an employer, will I be required to provide health coverage to my employees’ children until age 26?
Not necessarily. Certain limits apply, including a temporary exclusion for children who are eligible for health coverage under another employer’s plan. Also, although the new law requires employers to provide coverage to certain adult children, it may not require that employers pay for or subsidize that coverage.
We currently offer health coverage to our employees. Will existing coverage be “grandfathered” or otherwise exempt from the new law?
The new law does provide for grandfathering rules, but even the “grandfathered” health benefits plans that were in effect when the law was signed (March 23, 2010) will be required to undergo certain changes to make coverage more accessible. There are costs and benefits to preserving a health plan’s grandfathered status. An employer will need to decide whether it makes sense to try to preserve that status to take advantage of savings.
We have a union workforce. How does the new health care reform law affect us?
Generally, under the new law, insured health benefits that are collectively bargained will not be affected until the last collective bargaining agreement in effect when the law was enacted expires. Employers and unions must determine how much they can change their insured health plans without losing the exemption and how the exemption will apply to self-insured health plans.
How are part-time employees affected by the new health care reform law?
There is nothing in the new law that requires employers to provide health coverage to part-time employees. However, part-timers (regulatory agencies will need to define what constitutes part time) will affect the extent to which small businesses will be eligible for government subsidies to provide health coverage and whether certain provisions of the new law will apply to employers. Employers should consider how to structure their workforce to maximize benefits and minimize adverse effects.
When will the changes become effective?
Certain changes that affect employers will be effective as early as this summer. The bulk of the plan design changes will take effect in 2011, and some of the more significant changes, such as the establishment of Exchanges through which individuals can purchase health coverage, will become effective in 2014 or later. Employers should conduct an in-depth analysis of their existing plans and evaluate their options.
For more information on Ms. Hemphill and Mr. Pinheiro, or the Health Care Reform Initiative at Ballard Spahr LLP, please click here.