It has been six years since the Affordable Care Act was signed into law. While it has overcome numerous implementation hurdles and legal challenges during that time, the uphill battle is likely to continue in 2016. From new provisions and requirements to ongoing lawsuits, here’s what 2016 holds for health reform.
Employer Mandate
After several congressional repeal efforts and one IRS-imposed delay, the employer mandate is scheduled to take full effect this year.
Under the mandate, “applicable large employers” with at least 50 full-time employees must offer affordable, comprehensive health coverage to full-time workers, or else face penalties ranging between $2,000 and $3,000 per employee. The mandate was originally scheduled to take effect in 2014 but was delayed until 2015 for employers with at least 100 full-time employees, and 2016 for employers with at least 50 and no more than 99 full-time employees.
In addition, transitional rules enacted last year to ease implementation for employers will end in 2016. Among other things, the sunset of the transitional rules mean the percentage of full-time workers who must be offered health insurance will increase from 70% to 95%.
In an insight, Ilyse Schuman, Russell Chapman and Steven Friedman of the global employment and labor law firm Littler wrote, “With the transitional relief from penalties ending in 2015, the risk of failing to properly determine the status of full-time employee grows in 2016, while the complexity and lack of clear direction from the regulators continue.”
Individual Mandate
The penalty for failing to purchase coverage under the ACA this year rises to $695 per adult and $2,085 for a family, or 2.5% of family income, whichever is larger. In 2015, the penalty was the larger of $325 per adult and $975 for a family, or 2% of income.
CDC data show that the uninsured rate reached a new low of 9%, or about 28.5 million people, during the first six months of 2015. A Kaiser Family Foundation analysis released in October 2015 found that nearly half of the uninsured population — which it estimated to be at 32.3 million — are eligible for coverage under their states’ Medicaid programs or for federal subsidies to help them purchase coverage.
Reporting Requirements
The New Year also brings a swell of new ACA-imposed reporting requirements for employers and health insurers.
Under the IRS Code’s Section 6065, which was added under the ACA, applicable large employers are required to file documents with IRS and provide statements to full-time employees about the health coverage offered.
Information about coverage for the 2015 calendar year — the first year employers must submit such data under Section 6065 — is due in 2016.
Schuman, Chapman and Friedman predicted that employers will continue to face challenges this year due to “the convergence of full implementation of the employer mandate and the onset of the reporting requirements in 2016.”
2016 Elections
Although a full repeal of the ACA at this stage of implementation is unlikely, the 2016 presidential and congressional elections could heavily influence the future of the ACA.
Congress already has proven that it can delay or change major provisions of the law by passing the Bipartisan Budget Act of 2015, which repealed the automatic enrollment provisions, and a spending package that delayed the “Cadillac tax” until 2020. In addition, the House currently is considering a Senate-approved budget reconciliation bill (HR 3672) that would repeal some of the law’s major provisions, including both the employer and individual mandates. The White House has said President Obama will veto the bill if it reaches his desk.
The ACA also remains a hot topic on the presidential campaign trail, with several Republican candidates vowing to repeal or replace the law when they take office.
In an email to the Washington Post, Timothy Jost, a health law professor at Washington & Lee University and one of the nation’s leading experts on the ACA, noted that the ACA gives the executive branch significant leeway in implementing the law. He wrote that a GOP president ultimately could delay the implementation of various requirements and approve 1332 waivers to states that would exempt them from many of the law’s requirements.
Meanwhile, the Post‘s Stephen Stromberg noted that the election of a Republican president and a Republican-controlled Congress “would almost guarantee the death of Obamacare’s medical device tax” and could ease health plan requirements.
Legal Challenges
The ACA has faced an onslaught of lower court legal challenges and has been upheld twice by the Supreme Court. However, opponents of the law continue to file and pursue legal action against it.
Below, we describe some of the biggest cases that are making their way through the courts and could have rulings issued in 2016.
Sissel v. HHS
The Pacific Legal Foundation filed a lawsuit challenging the constitutionality of the ACA on behalf of a small business owner. The suit alleges that the ACA is unconstitutional since it raises revenue through taxes and did not originate in the House. The Supreme Court this year is expected to issue a decision on whether it will hear the case.
Texas, Kansas and Louisiana v. HHS
In October 2015, Kansas, Louisiana and Texas filed a lawsuit against the Obama administration claiming that an excise tax levied on private insurers to help fund the ACA ultimately is passed on to state governments because the insurers use some of the state funding they receive under Medicaid managed care plans to pay for the levy. They argue that the duty constitutes an unconstitutional federal coercion of the states because if they do not pay the tax, they could lose federal Medicaid funding.
Josh Blackman — an associate professor at South Texas College of Law, who informally consulted with Texas officials on the suit — said the Supreme Court previously has ruled that the federal government cannot coerce states by threatening the loss of federal Medicaid funding, while Jost has said the case is not a serious threat to the law, noting that the Supreme Court’s ruling “deals with very limited circumstances.”
U.S. House of Representatives v. Sylvia Burwell, et al.
In July 2014, House lawmakers authorized a lawsuit challenging the Obama administration’s power to change the ACA. The suit contends that Congress never authorized the Department of Treasury’s payments to insurers for cost-sharing reductions to help low-income consumers pay for out-of-pocket costs such as coinsurance, copayments and deductibles.
In September 2015, U.S. District Judge Rosemary Collyer ruled that the House has legal standing to file suit against the administration and pursue claims that the administration’s actions violated the Constitution. Collyer denied a request by the Obama administration to immediately appeal her decision to allow the suit to proceed. A final ruling in the case is expected in the upcoming months.
Zubik v. Burwell
In November 2015, the Supreme Court agreed to hear seven cases challenging an accommodation to federal contraceptive coverage rules for not-for-profits that hold themselves out as religious and oppose contraception. The high court has consolidated the suits into a single case and will consider whether the federal rules and the accommodation violate the Religious Freedom Restoration Act. The justices also will consider whether the third-party administrators operated by religiously affiliated organizations are required to follow the federal rules.
According to SCOTUS blog, the cases will be heard during the session that begins on March 21.
ACA’s Sustainability
While it is still too early to tell if the ACA is helping to achieve the triple aim of improving the quality of health and care while reducing costs, several experts say the law has proven its sustainability.
Larry Levitt, an expert on the law at the Kaiser Family Foundation, said in an interview with The Hill, “The risk of the law collapsing is very slim if not non-existent,” adding, “Enrollment is still growing, the risk pool is likely improving. At this point, the law seems perfectly sustainable.”
However, others point to rising health plan premiums for the 2016 open enrollment period as a potential concern for the law. Schuman, Chapman and Friedman wrote that “there might not be a sufficient number of healthy and young enrollees in the ACA plans” to keep costs down.
Those arguments suggest that the success of the exchanges to reach out to and enroll the remaining uninsured individuals will be a key challenge for the law going forward. In addition, observers will keep an eye on the new penalties that 2016 has to offer and employers’ ability to adjust to the employer mandate and the law’s new reporting requirements.
Around the Nation
Another repeal effort. House GOP leaders say that their first order of business when the House reconvenes this week will be to vote on legislation that would repeal the Affordable Care Act, theAP/San Francisco Chronicle reports.
On the campaign trail. According to the New York Times‘ “FirstDraft,” the conservative Heritage Action for America in letters to GOP presidential candidates this week said that the next Republican administration should commit to doing everything possible to fully repeal the Affordable Care Act.