Understanding Employee Benefits

Health Care Reform – What if it is Struck Down?

By | June 12, 2012

            There has been much discussion and blogging about different possible outcomes from the U.S. Supreme Court’s review of the Affordable Care Act (ACA). However, it is only recently that we are starting to see articles analyzing the effect that a complete repeal might have. If the Supreme Court strikes down the entire law, all of the tax and insurance provisions would potentially fall to the wayside, including many benefits that are currently being enjoyed by plan participants, namely:

1.       No co-payment requirements for preventive services such as cancer screenings

2.      Independent third-party appeals

3.      Required coverage for employees’ children up to age 26 under their parents’ group health plans

4.      Elimination of lifetime dollar limits

          Speculation is that due to contract restrictions, coverage for children who do not otherwise qualify as tax dependents could continue until age 26 until current contracts expire, but that employees would be taxed on the fair market value of these benefits if the law is struck down.

            Fortunately, some insurance companies are stepping forward to soften the potential impact that a partial or complete rejection of the law might otherwise cause. UnitedHealthcare, a unit of the UnitedHealth Group, which is headquartered in Minnetonka, Minnesota, announced this week that it would continue to follow a number of the ACA provisions even if the Supreme Court rules against the law. In particular, it announced that it would continue to offer policies with no co-pays on preventive services, would continue to use third-party independent appeals in the case of denied claims, would not rescind issued policies except in the case of fraud, and would continue to allow children to age 26 to remain on their parents’ policies. http://www.unitedhealthgroup.com/newsroom/news.aspx?id=59c64ad7-908b-4806-931f-aed3beff7ba0

            After UHC’s announcement, Aetna and Humana announced that they also would be retaining certain features of the ACA in their health insurance policies. It is not clear whether other insurance companies will take similar actions with respect to their issued policies. However, UHC, one of the largest and two other carriers have responded to what national polls show as very popular features of the law.

Contact Jeffrey Cairns for more information.