• U.S. District Court Rules ACA Unconstitutional; No Immediate Changes for Employers, Supreme Court Battle Anticipated

    U.S. District Judge Reed O’Connor for the Northern District of Texas ruled on Friday that the Affordable Care Act (ACA) is unconstitutional, in its entirety.

    A final ruling, however, may be months or even years away. It is important to keep in mind that the Individual Mandate is still in effect for 2018 and does not end until January of 2019. Thus, individuals must still have individual health coverage in order to avoid being penalized.  The other provisions of the ACA, such as the Employer Mandate, continue unchanged until there is an ultimate determination on this controversial and polarizing law.

    White House spokesperson Sarah Sanders has stated that “pending appeals, the law remains in effect.” Thus, individuals who recently enrolled in Obamacare insurance programs may (at least for now), be confident that their coverage is unaffected.

    The ruling is based on a suit that was filed in February 2018 in the Northern District of Texas.

    Friday’s ruling calls into question the legality of the ACA, arguing in part, that the law is unconstitutional since Congress has repealed the tax penalties on individuals who do not have health insurance, also known as the Individual Mandate. The Individual Mandate has long been perceived as the heart of the ACA, and many argue that once that feature is declared unconstitutional, the remainder of the ACA must also be deemed unconstitutional. Legal scholars from both parties have questions as to whether certain portions of the ACA can be severed from the whole and still survive. This legal concept is known as ‘severability’.

    This latest ruling traces a portion of its argument to the U.S. Supreme Court’s ruling in 2012 by Chief Justice John Roberts (the GOP swing vote thatupheld the ACA in 2012). That court held that the penalty/tax created for individuals who do not maintain health insurance on themselves is indeed constitutional because Congress does have the power to impose a tax on those without health insurance.

    Friday, Plaintiff’s Attorney General Ken Paxton argued that, with the elimination of the health insurance requirement, there is no longer a tax, and therefore the law loses its constitutionality. The theme from the 2012 ruling pertaining to the taxing powers of the government carried over to Friday’s ruling where Judge Reed O’Connor said that the individual mandate requiring people to have health insurance “can no longer be sustained as an exercise of Congress’s tax power.” The judge also concluded that this insurance requirement “is essential to and inseverable from the remainder of the ACA.”

    What are the Chances of an All-Out Toppling of the ACA?

    Choosing a winner in this battle royale won’t be easy. Many scholars, conservatives and liberals alike, believe that since the authors of the law drafted a severability clause — which holds that killing one part of the law does not necessarily kill the entire law — that it opens the door for this latest ruling to be struck down. Nevertheless, severability clauses will occasionally state that some provisions to the contract or law are so essential to the contract’s purpose and the framer’s intent, that if they are illegal or unenforceable, the contract will be voided.

    The plaintiffs, on the other hand, have been fortunate in getting U.S. Justice O’Connor, historically an Obamacare opponent, on their side. The battlefield has been set with various issues yet to be resolved including: Medicaid expansion, individual and employer mandates, pre-existing conditions, severability, and funding.

    The case will likely be appealed to the Fifth Circuit Court of Appeals in New Orleans, LA. From there, most legal experts expect it to be referred to the Supreme Court where Trump nominated Supreme Court Justice, Brett M. Kavanaugh will get his first opportunity to take part in arguably one of the most important cases of the 21st century.

    While both sides of the aisle gear up for this battle of the ages, one thing is still certain, the ACA is still the law of the land until further notification.

     

  • Do you need a Wrap document?

    According to the Employee Retirement Income Security Act (ERISA) passed in 1974, employers offering health and welfare benefits (health, dental and/or vision plans, AD&D/Term/Disability Insurance, wellness programs, etc) are required to provide plan participants with a Summary Plan Description (SPD) that clearly outlines details about the plan, its administration, and its benefits and claims process. (Click here to learn more about SPD documents).
     
    ESC provides ERISA-compliant SPDs to enrollees of the plans we offer, but this is not always the case with other benefit providers. In many cases, plan administrators provide plan documents that are informative but do not meet the ERISA-compliant standards of an SPD. Wrap documents are essentially mega-SPDs that help streamline the compliance process for companies offering multiple benefit options to employees.

    The ACA has provided government agencies that deal with ERISA issues additional resources to be more focused on compliance-related matters. The penalty for failing to provide a plan participant with an SPD on time is $110/day PER PARTICIPANT and failure to file a IRS Form 5500 (only applicable to companies with 100 or more ENROLLED in benefit plans, click here to learn more about IRS Form 5500 requirements) carries a $2,140/day penalty.
     
    There are 3 key reasons an ESC client would want to utilize a Wrap document to fulfill their ERISA SPD obligations:
     
    1. Your staffing company offers other health and welfare benefit options in addition to those provided by ESC;
    2. Your staffing company offers benefits “pre-tax” under a 125 plan;
    3. Your staffing company is required to file IRS Form 5500 
     
    In these cases a Wrap document will provide an easy, efficient way to remain in compliance with ERISA requirements and save your staffing company thousands in penalties.

    Failure to comply with ERISA requirements is costly. Until now, finding affordable qualified ERISA legal advice has been impossible. That’s why ESC is excited to announce a new partnership with myHRcounsel that provides you with affordable access to reliable legal advice.

    For as little as $37.50 per month, ESC clients can obtain an ERISA-compliant Wrap document solution and access to a compliance calendar, library of legal forms, and notices. For just $105 per month ESC clients can receive all of the above AND unlimited phone and email access to myHRcounsel’s ERISA, ACA compliance, and HR issue attorneys in all 50 states. ($165 per month if creation of IRS Form 5500 is included). 
     
    Click here now to request more information on this game-changing service partnership.
  • Important Reminder: PCORI Fees Due By July 31st, 2018

    The Patient-Centered Outcomes Research Institute (PCORI) trust fund fee was established by the Affordable Care Act and is assessed for each plan year ending after September 30, 2012 and before October 1st, 2019. The fee is applicable on sponsors of self-insured plans and is intended to help fund medical research.

     

    Essential StaffCARE has prepared a helpful guide to understanding and calculating PCORI fees.

    Please review the guide here.

Learn more about the latest updates in health reform and how they affect you.

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