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Obama victory secures health care reform law, but questions remain


President Barack Obama's re-election Tuesday night assures continued implementation of the health care reform law, but many details remain unresolved.

And President Obama's defeat of Republican challenger Mitt Romney, who had pledged to repeal the Patient Protection and Affordable Care Act, won't end continued legal challenges to the law.

The most immediate impact of President Obama's re-election, observers say, will be a speedup of health care reform law regulations that employers will need to comply with the law.

"There will be an avalanche of regulations,” said Gretchen Young, senior vice president-health policy with the ERISA Industry Committee in Washington.

“They (regulators) have to get it done. It is crucial,” said Chantel Sheaks, a principal with Buck Consultants L.L.C. in Washington.

For example, employers have been waiting for more than a year and a half for the U.S. Department of the Treasury to release guidance on a reform law provision of critical importance to nearly every company: the imposition of a stiff $2,000-per-full-time-employee penalty on employers that do not offer qualified coverage to employees.

Read literally, the law says the penalty applies even if just one full-time employee is not offered coverage. Last year, the Treasury Department said it “contemplated” in forthcoming regulations to make clear that the penalty would not apply if an employer offered coverage to “substantially” all full-time employees.

But 18 months later, employers still are waiting for that guidance.

Many other health care reform provisions have yet to be fully addressed.


For example, employers are waiting for Treasury to make clear if a provision that imposes a penalty if coverage is not “affordable” applies to individual and family coverage. Earlier, Treasury Department guidance said if the share of the premium paid by an employee for individual coverage was at least 9.5% of his or her income and the employee was eligible for and used a reform law subsidy to buy coverage in a public health insurance exchange, the employer would be liable for a $3,000 penalty for that employee.

Earlier this year, however, the Treasury Department said it was reconsidering that earlier rule to examine whether the premium should also apply if the premium for family coverage was not affordable.

In addition, employers are waiting for the U.S. Department of Health and Human Services to inform them how much they will have to pay to fund a $25 billion three-year federal reinsurance program that will partially reimburse commercial insurers writing coverage for individuals with high health care costs. Consultants estimate that the assessment for the Transitional Reinsurance Program will be between $60 to $90 per health care plan participant, which would mean that large employers would face millions of dollars in new assessments for a three-year period starting in 2014.

Aside from not knowing how much they will have to pay, regulators need to clarify many aspects of the reinsurance program, such as whether the assessment applies to participants in retiree health care plans.

“We really need guidance,” Ms. Young said.


And there is plenty of uncertainty on the legal front. Dozens of organizations have challenged a health care reform law regulation that will require employers, including nonprofit affiliates such as hospitals and universities of religious organizations, to extend coverage for prescription contraceptives.

In addition, a suit over premium subsidies, if successful, could stymie the main intent of the health care reform law — a big reduction in the 50 million people in the United States who are uninsured.

That suit, filed by Oklahoma Attorney General Scott Pruitt, challenges the legality of Internal Revenue Service regulations that say premium subsidies can be provided to eligible individuals who obtain coverage in exchanges set by the states and the federal government.

The Oklahoma suit says the health care reform law makes it clear that the subsidies are available for coverage through exchanges only set up by the states.

Since many states — perhaps close to half — may decide against setting up exchanges, millions of people in states where the federal government sets up exchanges — because the states don't — would not be eligible for premium subsidies.

“Court challenges will continue to be a thorn in the side of the administration,” Ms. Sheaks said.

How federal lawmakers tinker with the law is another unknown. But with President Obama's victory Tuesday night and the Democrats retaining control of the Senate, Republicans are likely during the next congressional session to move away from trying to repeal the reform law.

“There is no way the law is going to be repealed in the next two years, and Republicans know that,” Ms. Sheaks said.


As a result, Republicans will be more likely in 2013 to work with Democrats on making changes to the law, including technical corrections and those that have widespread support, Ms. Sheaks said.

While GOP attacks on the reform law will continue, “We may see negotiations where there will be give and take” among lawmakers, said Frank McArdle, an independent benefits consultant in Bethesda, Md.

And the proposals for health reform law changes that may emerge “could test the limits of what the administration is willing to accept,” said Paul Dennett, senior vice president-health care reform with the American Benefits Council in Washington.

The administration itself has plenty to do, especially in the realm of insurance exchanges — both those set up by states and those that the federal government will establish in states that do not.

“There is an awful lot to do in a short amount of time,” said Michael Thompson, a principal with PricewaterhouseCoopers L.L.P. in New York.