With Republicans now in control of both houses of Congress, Senate GOP leader Mitch McConnell has publicly vowed to repeal the healthcare reform law at any cost. That’s not going to happen while President Obama has veto power — but there is a very real possibility the Affordable Care Act (ACA) could get a major facelift.  

After all, the president himself has hinted at making some concessions regarding the controversial law.

One of the top changes those in the Benefits world expect to see: A return to the 40-hour per week threshold for defining full-time employees.

Under the current health reform regs, individuals who work at least 30 hours each week must be considered full-time equivalent (FTE) employees for ACA purposes.

In addition to this potential change, here are three additional changes we could see to the ACA.

1. A repeal of the Cadillac tax

For businesses the Cadillac plan excise tax, which takes effect in January of 2018, is one of the most hated provisions in a law that has plenty of despised regs. In fact, employers have consistently listed the Cadillac tax as one of the most concerning Obamacare provisions since the law took effect back in 2010.

As HR pros know, the Cadillac plan reg imposes a 40% tax on the most expensive or “Cadillac” health plans. This will apply to individual health plans worth more than $10,200 and families health benefits valued at more than $27,000, starting in 2018.

Because this tax doesn’t kick in until 2018, Republicans may be able to get the next president to sign a repeal bill between 2016 and 2018. And Democratic supporters of Obamacare may be open to accepting such a repeal bill if it means getting Republicans to keep other key health reform provisions in place.

Another potential scenario Bell says employers should watch for: Opponents of the tax convincing the Internal Revenue Service (IRS) to delay its implementation.

2. Changes to the Medical Loss Ratio (MLR) formula

According to the ACA’s medical loss ratio regs, major medical carriers must spend at least 85% of large-group revenue and 80% of individual and small-group revenue directly on healthcare or quality improvement efforts.

The current MLR formula keeps insurers from including compensation for agents and brokers in medical care spending totals.

But critics have have pushing for years to get broker comp removed from the calculations altogether. Their argument: Consumers are the ones who actually pay brokers; insurers merely collect the payment to the brokers — and streamline the process for customers.

The bulk of the Republicans and many Democrats agree with this stance. Plus, certain state-based public exchanges have been drumming up support from agents and brokers. So you may see the GOP succeeding in making changes to this reg.

3. Required exchange performance reporting

Bell believes the small, less-costly tweaks to the current law will have the best shot at taking effect. One example to watch for: H.R. 3362, the Exchange Information Disclosure Act, a bill that was reintroduced in January and received some significant Democratic support, with Yes votes from Dems who rarely cross party lines.

Among other things, the bill would require the U.S. Department of Health and Human Services to publish weekly ACA exchange activity reports in a specified format.

If we had to sum up what federal agencies such as the Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC) had planned for next year in just two words, it would be this: New regulations.  

At the Fall 2014 Regulatory Agenda meeting, federal agencies like the DOL and EEOC gave some insight into their progress on the more than 75 rules and regulatory proposals in their queue.

Here are the proposed deadlines of regs that will impact HR pros the most next year:

DOL action items

1. Changes to the DOL’s overtime rule under the Fair Labor Standard Act (FLSA) by February 2015. Specifically, the DOL will address the FLSA’s “white-collar” exemption, where workers who are paid a minimum salary of $455 per week — and are classified as executive, administrative or professional employees — are not entitled to overtime pay.
2. New definition of “fiduciary” by the DOL’s Employee Benefits Security Administration’s (EBSAs) by January 2015. The DOL has long been promising a revised definition of fiduciary under the Employee Retirement Income Security Act (ERISA), which would essentially expand the term and significantly impact many aspects of retirement plans.
3. A final rule revising the definition of “spouse” in the Family and Medical Leave Act (FMLA) to reflect the Supreme Court’s Defense of Marriage Act (DOMA) ruling. The DOL didn’t give a concrete date for this change; it just said it would happen in 2015. On top of expanding who’s entitled to FMLA leave.

HHS, DOL & Treasury’s Obamacare agenda

4. Final regs on the minimum value of employer sponsored health coverage — for purposes of premium tax credit eligibility — within the next two months. Like all Affordable Care Act guidance, the Treasury will work with United States Department of Health and Human Services (HHS) and the DOL to provide this info. Problems with the feds’ minimum value calculator led to a delay regarding Obamacare penalties and skinny plans.

EEOC’s wellness promise

5. EEOC guidance on wellness plans by February 2015. Following the heavy criticism it received for not issuing guidance but continuing to sue employers for their “involuntary” wellness programs, the EEOC announced it will be issuing proposed regs on the impact the Americans with Disabilities Act (ADA) has on employers’ wellness programs.

The health reform law has been in place long enough for employers’ compliance efforts to lose some steam. But complacency is leaving many firms wide open to problems.

Some of the health plan strategies employers have been using will hurt their ability to comply with the Affordable Care Act (ACA) moving forward.

The Kaiser Family Foundation recently listed some of the top ACA-compliance problems that can sneak up on employers.

The top three:

1. Grandfathered status loss

As HR pros are well aware, grandfathered health plans are exempt from more than a dozen of the major health reform rules, including the prohibition on annual and lifetime dollar limits on coverage, as well as the essential health benefits rules.

But here’s the problem: It’s very easy for previously grandfathered plans to have changed enough to comprise their grandfathered status.

In fact, the Kaiser research found that just 37% of companies still have a grandfathered health plan. That’s a significant decline from the 72% of employers that had at least one grandfathered plan back in 2011.

(Note: If you want to see if your plan is in danger of losing its grandfathered status, check out this eight-factor list.)

2. Extended waiting periods

As of 2014, non-grandfathered health plans are prohibited from making eligible employees wait longer than 90 days for insurance coverage.

However, the report found that more than a quarter (27%) of covered employees face a waiting period of three months or longer. And 4% of workers have a waiting period of four months or longer. That is unacceptable unless coupled with a bona fide “orientation period.”

There has been some confusion about waiting period calculations.

Remember: Employers must count all days — including weekends and holidays — when it comes to calculating the 90 days.

3. Wellness carrots (or sticks)

Another area where employers’ healthcare strategies can get them in trouble: wellness.

According to Kaiser’s research, 19% of employers offer lower premiums, reduced cost sharing or higher health reimbursement account or health savings account contributions to wellness plan participants.

But when employers roll out overly generous incentives (or harsh penalties) they could find themselves in trouble.

The maximum premium reduction/penalty under the ACA is 30% of the value of single-employee coverage — except for non-smoker incentives, which max out at 50%.

In a groundbreaking move, the Equal Employment Opportunity Commission (EEOC) is suing an employer, alleging its wellness plan violates the Americans with Disabilities Act (ADA). It’s lawsuit well worth taking a gander at.

Here’s what the ADA says: Employers can only require employees to submit to medical exams and medical inquiries that are “job-related and consistent with business necessity.”

One exception: Employers can ask employees to undergo medical exams and answer medical inquiries in conjunction with “voluntary” wellness programs.

However, there’s a problem with the whole “voluntary” part. The EEOC hasn’t released any definition or guidance as to what it considers a “voluntary” wellness program.

So employers are left to guess what’s voluntary and what isn’t, and that appears to be the root of the problem in the EEOC’s latest lawsuit.
‘Submit to assessment or pay premiums’

Here’s what happened: Wendy Schobert refused to take a health risk assessment that was part of a wellness program sponsored by her employer, Orion Energy Systems.

She had concerns about the confidentiality of the results.

The penalty for not participating: Orion said she had to pay the entire premium for her health insurance — $413 a month, plus a $50 non-participation penalty.

Had she submitted to the assessment, Orion would have picked up the entire tab for her health insurance.

After her refusal to submit to the assessment, Schobert tried to persuade others to follow her lead, which eventually led to her termination.
EEOC: ‘Wellness program not voluntary’

When the EEOC caught wind of Schobert’s tale, it sued Orion.

The agency’s allegations: The penalty for not participating in the health risk assessment portion of the company’s wellness program — having to pay $463 a month — was so steep it rendered the program “involuntary.”

That alone, however, isn’t illegal.

The EEOC’s real beef is that since medical inquiries were made of Schobert and other employees that were not “job-related and consistent with business necessity” (because they were preventive in nature) and were not part of a voluntary wellness program, the assessment violated the ADA’s rules regarding employee medical exams and inquiries.

The EEOC is also claiming that Orion illegally retaliated against Schobert for voicing her “good-faith” objections to the wellness program.
Warnings to employers

The lawsuit still has to play itself out, but it offers three distinct warnings to employers:

* Warning No. 1: Expensive penalties are likely to render your wellness programs involuntary in the EEOC’s eyes. This is the first time the feds have shed light on what they consider “involuntary,” and while no specific threshold was mentioned, it’s clear expensive penalties won’t do you any favors with the EEOC. Attorney Robin Shea, writing on her Employment & Labor Insider blog, said she recommends erring on the side of caution and offering rewards for wellness participation instead of imposing penalties against non-participants.
* Warning No. 2: Don’t ask employees to submit to medical exams or inquiries that aren’t job-related unless you can say beyond a shadow of a doubt that you’re doing so under a wellness program that is truly “voluntary.”
* Warning No. 3: Be careful not to retaliate against employees because they refuse to participate in wellness programs or because they voice their displeasure about such programs — even if they go so far as to actively attempt to persuade others not to participate.

If employees haven’t come to you with questions about the Affordable Care Act’s (ACA) affect on them, get ready … they’re coming. Want to know what they’re going to ask? 

In a recent survey to gauge how single-employer plans are being affected by the ACA, the International Foundation of Employee Benefit Plans, a nonprofit research and education organization, asked employers to submit the most common questions their HR and benefits staff have been receiving from employees about the law.

More than 600 employers responded to the query.

Here are the top 10 questions employers were approached with — along with ways you can respond:

1. How do the exchanges work? Am I eligible? Are they free? Could I qualify for a subsidy? How does exchange coverage compare to my current coverage?

Answer: The exchanges act as an insurance agent of sorts, allowing employees to shop for plans that meet their needs. And yes, everyone can to use them. But whether or not employees get a subsidy depends upon a number of things — like whether or not you offer them coverage, the level of that coverage and their income.

2. How does the law affect me? Do I need to do anything?

Answer: The biggest effect is that individuals are now forced to have insurance or pay a penalty. And if you’re offering them coverage that meets the law’s minimum requirements, they don’t have to do anything.

3. What will this cost me? Why are my costs going up?

Answer: Just about the only cost figures you could reasonably present them with are your health plan’s premiums and cost-sharing information. As for why costs are increasing, it’s because the cost to treat people in general is increasing, and insurers are accounting for that.

4. Is the company planning to drop coverage?

Answer: Only you can say for sure.

5. How will our benefits change? Are the changes because of health reform?

Answer: Chances are your plan underwent some changes over the past year — or you’re planning changes for 2015. Be prepared to explain what they are and the reasons behind them.

6. Can my child stay on the plan longer?

Answer: Starting in 2010, the health reform law mandated that plans’ coverage to dependent children be extended until they turn 26. But beyond that, nothing has changed in this area as far as federal law is concerned.

7. Do I have to get coverage if I don’t have it now? When will there be an open enrollment opportunity?

Answer: Again, individuals are required by law to obtain health coverage or pay a penalty. The exchanges will open again this November. You’ll also want to be prepared to share your plan’s next open enrollment period begins.

8. Will I have an average of 30 hours per week and qualify for benefits in 2015?

Answer: If they don’t qualify for your company-sponsored plan, they can always obtain health coverage on the exchanges in November.

9. Are we dropping spousal/dependent coverage?

Answer: Again, by law, dependent children must be allowed to remain on a parent’s plan until age 26. However, employer plans are not required to cover spouses. But be prepared to share whether you will or not.

10. How does the law impact the future of the company?

Answer: This is a broad question, and one only you can answer. But if you don’t plan to make any drastic changes as a result of the law, share that with employees. It’ll help put them at ease.

As you’ve probably heard, two federal appeals courts issued contradictory rulings this week concerning the part of the Affordable Care Act that provides subsidies to individuals who can’t afford health insurance premiums. So what does this mean for the future of Obamacare?

First, some background. Both cases center on a single phrase in the section of the health care reform law that states the government can provide subsidies to those who buy insurance on an exchange “established by a state.”

In the case before the District of Columbia appeals court, Halbig v. Burwell, a three-judge panel ruled that the law should be interpreted exactly as written — thus only allowing the subsidies in the 16 states (and the District of Columbia) which have set up their own exchanges.

Thus, participants in the 34 remaining states would not be eligible for the subsidies — a development that would largely gut the whole health reform program.

Just a couple of hours after the D.C. court issued its ruling, the Fourth Circuit Court of Appeals in Richmond, VA, released its decision — and it was exactly the opposite of that of its sister circuit.

In King. v. Burwell, the judges ruled that the ACA language was ambiguous, so that the Obamacare subsidies should be available to participants using any health exchange, state-established or not.

The Obama administration immediately announced it would seek an “en banc” hearing in the D.C. case — bringing the matter before the entire 11-member appeals court. The administration also said all subsidies will continue during the appeals process.

Whatever the outcome, it’s entirely possible that the question will end up before the U.S. Supreme Court.
If D.C. decision does hold up …

For the sake of argument, let’s say the D.C. court’s decision stands. What would that mean for Obamacare?

Here’s what Tiffany Downs, an attorney for the law firm FordHarrison, had to say:

The D.C. Circuit’s ruling … is a significant setback for the Obama administration …

The ruling could impact the ACA’s requirement that large employers offer affordable health care as defined by the Act or pay a penalty. The penalty is triggered when an employee receives a subsidy for purchasing insurance on an Exchange. Reducing the number of individuals who receive subsidies will decrease the number of employers subject to the penalty.

Additionally, this ruling could impact the individual mandate, which requires most Americans to obtain health insurance that meets the requirements of the Act or face a penalty. Low-income individuals are exempt from this requirement. The Act defines low-income individuals as those for whom the annual cost of health coverage exceeds eight percent of their projected household income.

In calculating this percentage, the premium tax credit is deducted from the cost of the health insurance. Thus, if the tax credit is not available for insurance purchased on federal Exchanges, the number of people exempt from the individual mandate will increase exponentially.

What are administration’s chances?

What are the chances the D.C. ruling actually stands up? Not very good, according to Tom Goldstein, an attorney with extensive experience before the Supreme Court and co-founder of SCOTUSblog.

Writing in the Washington Post, Goldstein said he thought “the administration probably will come out ahead in the end.”

Why? Because under the law, courts defer to a broader interpretation of a statute “if the language is ambiguous and the administration’s position is reasonable,” Goldstein said.

What’s more, many other sections of the law refer to an exchange established by a state, but actually cover the federal government.

“Also, the law actually requires every state to set up an exchange, and it refers to all the exchanges as having been established by states,” Goldstein writes. “So you can look at the statute as a whole and reasonably read it to extend the subsidies to residents of every state.”

So. At least one expert thinks the administration will eventually win this battle. But making predictions about the outcome of federal court cases — especially ones that may well involve the Supreme Court — is a tricky business indeed.