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Employers face decisions if court overturns entire law

Posted On: Apr. 1, 2012 12:00 AM CST

WASHINGTON—There's good news and bad news for employers if the U.S. Supreme Court scraps the entire Patient Protection and Affordable Care Act, health benefits experts say.

While employers would regain their former flexibility in designing health benefits, they also would have to decide what to do with plan changes they've already made to comply with the law, such as extending coverage to employees' adult children—a move that benefit experts warn could be very unpopular.

Employers also would lose the opportunity to take advantage of provisions in the law that may have led to lower costs and improvements in care quality, such as research into treatment efficacy and outcomes.

“Once you provide a benefit, even if legally you can take it away, as a sense of company morale, it is every difficult to take it away; and this has been a very popular benefit,” said Chantel Sheaks, a principal at Buck Consultants L.L.C. in Washington. “It's the same issue for companies that lost their grandfather status and gave preventive care without copayments. Human resource departments will be getting a lot of phone calls.”

“If the law is invalid, it returns flexibility to design benefits without worrying about compliance with the letter of the law as opposed to what makes sense for their employees,” said Steve Wojcik, vp of public policy at the National Business Group on Health in Washington. But employers may have made physical workplace changes to—for example, accommodate nursing mothers—which he said may be difficult to take away.

“There are a lot of really innovative and cutting-edge system and payment reforms in the law that make up the bulk of the law. Losing that momentum would set us back years. We'd be going backwards instead of forward,” said Shawn Nowicki, director of health policy at the Northeast Business Group on Health in New York.

“We think there are some very good provisions in the legislation, so if the whole thing were struck down, we would need to reconstruct the value-based purchasing provisions,” said Andrew Webber, president and CEO of the National Business Coalition on Health in Washington.

“There are many elements of the legislation that employers support. But at the same time, employers don't like mandates and penalties and excise taxes,” he said.

PLUS: Read Business Insurance's complete coverage of the Supreme Court health care decision.