Affordable Care Act updates
States and federal agencies are in the process of implementing the Patient Protection and Affordable Care Act (also known as PPACA, the Affordable Care Act (ACA), the Act, or simply healthcare reform). Many people are already benefiting from the consumer protections that the Act provides. There has been a lot of activity on healthcare reform in recent months at the state and national level. Many of these developments will have implications for our members at home and at the bargaining table.
In 2014, each state will be required to establish an exchange, or marketplace, that will provide one-stop shopping for individuals and small employers. At the state level, a key issue is the construction of these exchanges. Below is an update on other developments of interest regarding PPACA.
The Affordable Care Act has withstood a number of legal challenges, most of which target the individual mandate. Three out of five district court decisions have upheld the constitutionality of the PPACA. The decisions of each court were then appealed. The Sixth Circuit appellate court upheld the constitutionality of the law. Recently, the Eleventh Circuit ruled the individual mandate unconstitutional. Decisions from other other courts will be forthcoming.
The PPACA remains the law of the land unless the U. S. Supreme Court decides otherwise.
Meanwhile, conservative efforts to defend the law continue. In May, the U. S. House of Representatives voted to cut off federal funding for state healthcare exchanges. However, this effort is not expected to pass the Senate.
End of the Early Retiree Reinsurance Program
The Early Retiree Reinsurance Program, which reimbursed employers for a portion of the cost of early retiree health insurance coverage, ran out of money earlier than expected. The program announced in May that it is no longer taking applications.
Legislation has been introduced that would replenish the fund, allowing it to continue to make grants. We will continue to track the legislation. Healthcare.gov has a state-by-state list of employers who received reimbursements .
Definition of a 30-hour work week
Starting in 2014, the Affordable Care Act levies penalties against large employers (with 50 or more full-time equivalent employees) who do not ensure their full-time employees, or who offer coverage that is unaffordable (single coverage exceeds 9.5 percent of household income) or inadequate (pays for less than 60 percent of covered expenses). The penalties apply when an employee receives a subsidy to buy insurance in their state’s exchange. For the purpose of assigning penalties to employers, the Act defines “full-time” as working 30 or more hours per week. The three agencies responsible for implementing the Affordable Care Act (HHS, DOL, and Treasury) are in the process of defining full-time for employees who do not work a standard 30 hour week, year-round.
AFT has been active in this dialogue with the agencies. We raised the issue of 10-month and academic-year employees at a DOL forum, and we are currently drafting comments to submit to the Treasury. We will let you know when the agencies clarify what they mean by full-time. Remember, employers do not have to cover full-time employees. However, they may be subject to penalties if they do not.
Healthcare Reform in the States
A look at Vermont and Utah shows how differently states are approaching healthcare reform.
Vermont has passed single-payer health care! The governor of Vermont recently signed a law that paves the way for a single-payer system in the state. Vermont will also create a health insurance exchange, which will “vastly simplify insurance purchasing for all Vermonters, regardless of how [they] pay for it,” according to the governor’s office. The state has applied for a State Innovation Waiver, which would allow them to fully implement single-payer in 2014, instead of waiting until 2017, as PPACA currently requires.
In contrast, Utah’s exchange is an example of an unregulated marketplace. Utah chose not to negotiate with insurance companies to get high-value plans for consumers. Instead of being an “active purchaser,” Utah admits to the exchange any qualified plan that applies, regardless of price or quality. Not surprisingly, plans offered in the Utah exchanges often cost more than plans offered outside the exchange.
Utah’s exchange caters to businesses that want to offer defined contribution plans. In such plans, the employer gives a limited amount of money to each employee to buy his or her own plan on the exchange. The employer contribution may not be enough to pay for a policy, and it may not increase as premiums increase.
Utah’s exchange does not help consumers choose among plans; instead, it overwhelms them with a bewildering array of plans. Finally, Utah’s exchange has not expanded health coverage in the state, nor has it attracted as many participants as it expected.
Many other states are in the process of establishing exchanges and have opportunities for public involvement in the process.
 Governor Peter Shumlin, State of Vermont. “Gov. Shumlin signs historic health care reform bill,” May 26, 2011. http://governor.vermont.gov/newsroom-health-care-bill-signing
 Corlette, Sabrina; Joan Alker, Joe Touschner and JoAnn Volk. “The Massachusetts and Utah Health Insurance Exchanges: Lessons Learned,” Georgetown University Health Policy Institute, March 2011. www.rwjf.org.