Supreme Court Upholds Health Law; Now the Work Begins

As businesses and consumers prepare for new insurance rules, Republicans in Congress will try to overturn the health care law.

Now that the Supreme Court has upheld President Obama's sweeping health care reform law, employers, insurers and states that put off preparations during the legal fight will have to rush to meet deadlines.

SEE ALSO: What the Ruling Means for Health Care Stocks

The ruling is a sweeping victory for the president, but is sure to enrage conservatives as the election approaches. Congressional Republicans immediately said they would try to repeal and replace the law, but that will be a difficult climb as long as Obama remains in office.

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If Obama is reelected, he'll veto any attempt to kill or weaken the law and his regulators will move ahead with implementing it. But if Republican Mitt Romney wins the Oval Office, all bets are off. Even if Senate Democrats are able to bottle up any "repeal and replace" legislation, Romney could scuttle the law. It gives broad authority to the regulatory agencies, and Romney could simply have the agencies delay rules or refuse to enforce those already on the books, says Chantel Sheaks of Buck Consultants.

The mandate that all Americans have health insurance or pay a penalty takes effect in 2014. The Congressional Budget Office estimates that 4 million workers will sign up for the first time, which will mean additional costs for their employers.

But other provisions kick in sooner. For example, by October of this year, employers must provide workers with a four-page, easy-to-read summary of benefit coverage. And next year, they have to prepare W-2s that include the value of a worker's health care coverage.

Another big deadline, in the spring of next year, requires employers to give workers information on how state exchanges and government subsidies will operate. Many of those details are still being worked out.

Other key elements of the law of interest to employers take effect in 2014, including the "employer responsibility" provisions that may subject employers with 50 or more workers to penalties; incentives to encourage individuals to engage in employer wellness programs; and requirements to automatically enroll workers into a health plan.

States that decided to hold back on developing exchanges until the Supreme Court ruled will also need to kick into high gear. About one-third of states are in this category, and they may not be able to meet the Jan. 1, 2014, deadline. Until they are ready, the federal government will step in with its own exchange or partner with states to provide some services.

Martha Lynn Craver
Associate Editor, The Kiplinger Letter