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What Could Health Care Reform Mean for Employers?

Posted on January 20, 2010 by Littler Mendelson

President Obama has made healthcare reform in the U.S. a major legislative priority.  Whether a healthcare bill will ultimately be enacted and in what form is unclear.  Democratic members of Congress are currently reconciling the Senate's Patient Protection and Affordable Care Act (H.R. 3590) with the House of Representatives' Affordable Health Care for America Act (H.R. 3962), both of which narrowly cleared their respective chambers.  While these bills contain important differences, both contain a number of provisions that would dramatically change the scope and content of employer-provided health insurance.

Both bills would penalize large employers that do not offer health insurance to their workers, and require those employers that do provide insurance to meet certain cost and benefits standards.  In addition, the House bill would significantly restrict the ability of employers to change retiree health benefits, while the Senate bill would not.  The Senate bill - but not the House bill - would impose a 40% excise tax on high-cost "Cadillac" health plans. Both bills would, among other changes: impose minimum medical loss rations on health insurers; limit the amount employees can contribute to flexible spending accounts; and institute a new premium tax on group health plans to fund comparative effectiveness research. 

In essence, the various mandates, penalties, and restrictions in both pieces of legislation would necessarily force employers - if a healthcare reform bill is enacted - to examine whether it would be more costly to provide employees with health coverage or pay the fines.  For a more in-depth analysis of how the various provisions in the healthcare bills would impact employers, continue reading What Does Health Care Reform Mean for Employers? The Top 10 Questions Employers Should Ask About Health Care Legislation written by Ilyse W. Schuman and Steven J. Friedman.
Tags: Health Care Reform
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