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Health care act ruling by Supreme Court may impact benefits


ORLANDO, Fla.—The U.S. Supreme Court's upcoming ruling on the Patient Protection and Affordable Care Act could be complicated and result in a flurry of legislation if all or part of the law is declared unconstitutional, human resource association WorldatWork said last week.

Cara Woodson Welch, Washington-based vp of policy and public affairs for the Scottsdale, Ariz.-based organization, presented the group's outlook on court cases, legislation and federal regulations that could affect employee compensation and benefits on Monday.

Speaking at WorldatWork's Total Rewards 2012 Conference & Exhibition last week in Orlando, Fla., about the expected Supreme Court ruling on the health care reform law, Ms. Welch said it's unclear whether the court will rule on the law as a whole or rule on specific parts of the law.

“I think it's going to be a very complicated decision,” she said.

If the court were to strike down the individual mandate that requires most U.S. residents to enroll in a qualified health care plan, Ms. Welch said it's likely that Congress would draft legislation to uphold pieces of the mandate. That includes a ban on insurance exclusions for people with pre-existing health conditions.

Ms. Welch said a fine for individuals who do not adhere to the individual mandate could be deemed to be a tax by the Supreme Court. If so, that could prevent the court from ruling on whether the individual mandate is constitutional, because the penalty wouldn't take effect until 2014.

“You can't have a lawsuit on a tax if it hasn't been collected yet,” Ms. Welch said.


Additional lawsuits and legislation moving forward right now could affect areas such as equal pay for people who hold similar jobs and provisions that allow employers to provide flexible schedules for employees, Ms. Welch said.

In a separate session, John Barkett, Washington-based director of product marketing for Extend Health Inc., said state health insurance exchanges established by the Patient Protection and Affordable Care Act could help companies offer affordable health insurance for their employees and retirees by creating a competitive market similar to Medicare.

San Mateo, Calif.-based Extend Health operates the largest private Medicare exchange in the United States.

“The Affordable Care Act, in changing the dynamics of the individual market, could provide a viable, sustainable alternative to group health plans for employers who want to offer benefits,” said Mr. Barkett, who is a former analyst with the Office of Health Reform at the U.S. Department of Health and Human Services.

Carl Cudworth, Austin, Texas-based director of benefits for textbook company Houghton Mifflin Harcourt Publishing Co., described how the Boston-based company worked with Extend Health to provide health benefits to about 700 of the company's retirees who are over age 65—many of whom receive subsidized or fully paid health benefits from Houghton Mifflin.

Last year, the company used Extend Health's exchange to help retirees choose from nearly 200 Medicare plans offered by 36 insurers. The plan allowed Houghton Mifflin to save 15% on its health care costs for older retirees, while allowing them to receive benefits that were “equal to or greater than” the company's previous group health benefits for those retirees, Mr. Cudworth said.


The success of the Medicare exchange program has prompted Houghton Mifflin to consider expanding the benefit structure to more retirees, Mr. Cudworth said.

“If we can recreate this with pre-65s, I'd love to see it,” he said.

Representatives from Genesis HealthCare System in Zanesville, Ohio, discussed pharmacy benefits management strategies in another session.

Employers can use copay pricing structures to drive employees toward generic prescriptions and help keep drug costs down, said Jim Clouse, pharmacy manager for Zanesville-based Northside Pharmacy, which is owned by Genesis HealthCare.

For instance, Mr. Clouse recommended that employers set copays for brand-name drugs that are at least $20 more than generic prescriptions. Alternatively, he suggested that companies could encourage employees to choose generic prescriptions by requiring them to pay for any difference in cost between a brand-name drug and its generic substitute.

“If the patient chooses the brand name, you're going to pay what you would pay for the generic” prescription, Mr. Clouse said.

Jeff Robinson, benefits and compensation manager for Genesis HealthCare, said the system has seen success with enlisting its doctors to conduct peer-to-peer reviews with physicians whose prescribing habits are geared toward brand-name or costly medications.

“Engaging those a mutually beneficial thing to help their patients,” Mr. Robinson said, whose hospital system has 3,500 employees.

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