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Immediate and Long-Term Challenges For Employers Under Health Care Reform

Release Date: May 05, 2010

After a year of heated debate in Congress, Federal health care reform is finally a reality. The new legislation will substantially change the way health care is provided and paid for, and creates both immediate and long term challenges for employers who sponsor group health plans.

To read the entire Alert, please click here.

If you have any questions about health care reform, please contact Robert W. Patterson at 716.843.3910 or rpatterson@jaeckle.com, or Michele O. Heffernan at 716.843.3850 or mheffernan@jaeckle.com.

The health care reforms passed this year reside in two new laws: the Patient Protection and Affordable Care Act, signed into law by President Obama on March 23, 2010, and the Health Care and Education Reconciliation Act of 2010, a series of amendments to the Affordable Care Act that was signed into law on March 30, 2010. The two new laws will be referred to collectively as the "Affordable Care Act" in this Alert.

The sweeping changes made by the Affordable Care Act will significantly affect employer group health plans, health insurers, health care providers and individual citizens. This Alert will focuses on changes that impact employer sponsored group health plans.

Congressional supporters of the Affordable Care Act claim that it will expand and improve health insurance coverage and help slow increases in the cost of health insurance. The new law attempts to accomplish these goals in part by:

· significantly increasing regulation and oversight of the health insurance industry; and

· establishing incentives and penalties to encourage employers to provide affordable health insurance to employees, and employees and individuals to acquire and maintain coverage.

In particular, beginning January 1, 2014 the Affordable Care Act will require every U.S. citizen to either maintain health insurance that provides "minimum essential coverage" or pay a monetary penalty. Employers will also face monetary penalties if they do not provide affordable minimum coverage to their employees. These are the so called individual and employer "pay or play" mandates.

Immediate and Long Term Changes

The changes enacted by the Affordable Care Act that will most directly affect employer health plans can be divided into two broad categories:

Immediate Reforms: A series of provisions, mostly health insurance reforms, go into effect for plan years beginning on or after September 23, 2010 (6 months after the date of enactment of the Affordable Care Act). For calendar year plans and insurance contracts, this effective date will be January 1, 2011. Note, however, that some provisions go into effect immediately.

To read the rest of the Alert, please click here.

If you have any questions about health care reform, please contact Robert W. Patterson at 716.843.3910 or rpatterson@jaeckle.com, or Michele O. Heffernan at 716.843.3850 or mheffernan@jaeckle.com.

This Jaeckle Alert, prepared by the attorneys at Jaeckle Fleischmann & Mugel, LLP, is intended for general information purposes only and should not be considered legal advice or an opinion on specific facts. For more information on these issues, contact one of the attorneys listed above or your existing Firm contact. Prior results do not guarantee a similar outcome. The invitation to contact is not a solicitation for legal work in any jurisdiction in which the contacted attorney is not admitted to practice. Any attorney/client relationship must be confirmed in writing.

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