The healthcare landscape is rapidly shifting, and the Supreme Court’s expected ruling on the Affordable Care Act (ACA) will accelerate the rate of change. While we don’t yet know the outcome of the Court’s deliberations, we can anticipate a number of potential implications for employers and employees. To help you plan ahead and prepare, JA Benefits offers its analysis of the possible effects that the ruling may have on employer health care plans.

If the Affordable Care Act is Upheld

The date of implementation is not until 2014, so even if the act is upheld in its entirety we will not see immediate sweeping changes. Nonetheless, we can anticipate that a number of individuals who have not had access to health insurance in the past will now be eligible through federal programs. The cost of that coverage will likely be shifted to existing policy owners, many of whom will see their rates rise.

What this means for employers:

  • Employees may have additional benefits options beyond what you are providing. Your human resources department will be tasked with helping them identify the best course of action.
  • If your employee population is generally healthy, you are likely to see your rates rise as the cost of covering high-need individuals shifts to the larger population. Conversely, some employers will see a reduction in cost if they were previously responsible for the health care costs of many max-rated individuals.
  • Coverage networks will likely shrink. Your employees will need to be educated on their in-network providers and guided toward the best choices.
  • Reducing claims will become even more of a priority as rates rise. Preventive health and wellness offerings will be a key strategy for controlling costs.

If the ACA is Overturned

Many states that have not already done so are likely to move forward to create their own health care legislation in the absence of federally mandated programs. Expect a “mad scramble” in the state legislatures to piece together policy.

What this means for employers:

  • An already-complex code will become even more so, necessitating ever-greater information and expertise.
  • Even if your state does not adopt new health care policies, the effect of other state’s legislation on national providers and the industry as a whole is still likely to result in significant rate increases.
  • The trends that we have already seen in health care will continue, with a small number of individuals generating the great majority of health care costs, and at least 75 percent of those costs stemming from preventable diseases. Personalized support and lifestyle-related offerings will take on increasing importance for reducing claims.

If the Individual Mandate is Withdrawn from the ACA

A third potential ruling is the removal of the component of the act requiring individuals to purchase insurance. In this scenario, we anticipate that the insurance industry will still be prevented from excluding individuals with preexisting conditions and youth up to age 26 will still be eligible for coverage on their parents’ policies. These provisions will, again, drive up costs for many while reducing costs for a few. However, employers will likely remain as the primary source of insurance and will bear more of the direct financial burden than they would in a situation that increased Medicaid eligibility and created more federal or state coverage options.

What You Can Do Now

No matter the outcome of the Supreme Court’s decision, your best strategy as an employer is to help your employees become healthier. In any scenario looking forward, we see insurance rates rising, and if the current public health trends are not reversed, claims will rise as well. Stemming those costs can only be achieved by reducing preventable illness, particularly with respect to the 20 percent of individuals who account for more than 80 percent of costs. Even if the ACA or state programs shift more of the health insurance responsibility to individuals and the government, the future of your businesses rests on the health of your employees.

How we can help:

  • We can provide expertise to puzzle through the changing legislation and identify the most cost-effective options for providers and networks.
  • Wellness programs should be a priority. We can help you set up:
    o Programs to promote a healthy lifestyle, including incentives to encourage smoking cessation, proper nutrition, and increased physical activity
    o Tools to create a company culture of wellness
    o Onsite or nearby clinic services to treat problems as they arise, before they become emergencies
  • Until the legislative decisions are made, taking care of your employees now is the best means of positioning yourself to weather the storm of health care reform. As your trusted benefits advisor, we can provide you with the best health care options to start improving your employees’ health today.

Contact JA Benefits with your questions: 1-800-663-5960 or doug.johnson@jabenefits.com

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