Domino Effect: Challenge to Subsidies Make Mandates and Penalties Endangered Species?

If the healthcare picture wasn’t already muddy enough, now we have more bumps in the road ahead. Most of the press coverage and discussion over this past week has been focused on the subsidy ruling and where that’s headed. And, rightly so.

However, the domino effect may be equally impactful, maybe even more so. Expect the subsidy discussion to broaden and include the legitimacy and relevance of the Affordable Care Act (ACA) imposed coverage mandates and penalties – both for individuals and for employers.

domino effect, dominoes falling

If the subsidies are struck down, even temporarily, it stands to reason that mandates and penalties – both individual and employer – will also be called into question and perhaps disappear.

If in the majority of states subsidies are not available for eligible individuals, then the vast majority of individuals in those states would have no mandate to purchase coverage. It follows then that employer penalties in those states would effectively disappear.

By many accounts, the challenge to the subsidies is headed to the Supreme Court.  Whether or not that really happens is up in the air and still anyone’s guess. If it does, then short of some sort of political resolution (possible but highly unlikely) we will have to wait at least a year or more for resolution. And, all bets would be off on the outcome.

Until then the subsidies remain available and mandates and penalties remain in play.

What does this mean for employers?

A sure signal of plenty more bumps in the in the healthcare road until things settle down with the ACA. Expect plenty of foggy conditions and winding roads under construction before any “new normal” sets in.

Make sure you pick the right driver when it comes to driving your health coverage bus.

Work with people that:

  • Are keenly tuned in to what’s going on;
  • Are savvy in understanding and interpreting your interests;
  • Are not afraid to innovate, and
  • Are nimble enough to help you make the right adjustments as conditions change.

You’ll need them to help you avoid any obstacles in the road, keep your employees protected and make sure the bus keeps traveling in the right direction.



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