What Next for Health Care?

Following the Supreme Court's decision to uphold the Affordable Care Act, every pundit in the country has written about its impact on consumers, businesses and the election. In order to avoid your having to read them all, here's the short version of what I expect to happen.

House Majority Leader Eric Cantor (R-VA) has announced that the House will vote to repeal the legislation on July 11. The vote will pass but be merely symbolic, because it cannot pass in the Senate, which is still controlled by Democrats.

There may be other efforts to derail the bill through amendments on appropriations bills to deny funds for the Department of Health and Human Services to carry out the law. These too, will fail in the Senate for the same reason.

The primary impact for businesses occurs starting in 2014. On that date, any business with more than 50 employees will be subject to a "free rider" tax if any employee obtains subsidized insurance from state health exchanges. Here's a summary:

Employers who do not offer coverage that meets minimum requirements to all their full-time employees, and have at least one full-time employee who qualifies for a subsidy, will be required to pay $2,000 per year for each of their full-time employees except for the first 30.  

Also, even employers who offer coverage that meets minimum requirements to all of their fulltime employees but still have at least one full-time employee who qualifies for the subsidy will be required to pay $3,000 for each of their employees receiving a tax credit.

Because the employer penalties don't start until 2014, there is time for Congress to make changes. These changes will become more likely in the event that the Republicans control the Senate and the Presidency. If Mitt Romney were to be elected and have a Republican Congress, Democrats would be unable to stop a repeal by using a filibuster. The health care repeal could be attached to a budgetary process (reconciliation.) Reconciliation bills only require a majority vote. In fact, that process was used during enactment of the Affordable Care Act.

The bottom line is that the Supreme Court decision did not reduce business uncertainty. There won't be better clarity until after the November elections.

Larry Sabbath

Legislative Advocate

NCISS

7501 Sparrows Point Boulevard

Baltimore, Maryland 21219-1927

T-(800) 445-8408  F-(410) 388-9746

lsabbath@lobbyist4u.com

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