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How Politics And The Pandemic Are Affecting Employee Benefits

Everyone is wondering how the world of employee benefits is going to change as a result of today’s unprecedented public health situation. Millions of Americans have lost employer-based coverage as they struggle with a contracting economy driven by the coronavirus threat.

Two major factors are shaping the future of employee benefits as we know them:

1. Public Health Worries About Coronavirus

From March through May, year-over-year Affordable Care Act sign-ups saw an increase of about 154,000 people. This is the option that many 1099 contractors and small business owners have been focused on for the last several years. After a period of uncertainty and technical difficulties, ACA policies have generally seen an uptick in popularity, and many people may reassess their feelings about the ACA today.

That is especially true if ACA policies will enable Americans to gain access to a hoped-for vaccine for the coronavirus. Even the most optimistic predictions about a vaccine say that it won’t appear until late into Q1 2021, with Q2 more likely. However, many of the front-running vaccine manufacturers have claimed they will make the vaccine available at affordable prices or even at cost.

2. Washington DC Politics

Several politicians throughout Washington DC have been engaged in efforts to strike down the Affordable Care Act for years. This began before the current coronavirus issue and is likely to continue far into the future, perhaps even after a vaccine is available. While there may not be the political will to repeal ACA right now, there are other mechanisms that can be used to scuttle the law.

How Current Supreme Court Cases Could Change Employee Benefits

As you read this, the Supreme Court is involved in reviewing a number of cases potentially important to the future of employee benefits. These are cases that the Court has already agreed to hear, giving up on the opportunity to maintain the status quo that Justices hold by refusing to look at a case.

While there are several cases of interest to employee benefits, the Department of Justice effort to strike down the Affordable Care Act is the most important. Sponsored by Republicans in Texas and seventeen other states, the filing states that the entire Affordable Care Act should be struck down.

The basis of the motion is the idea that, without the “Individual Mandate” that penalizes Americans for not holding health insurance, the entire law should be terminated with immediate effect. The “Individual Mandate” penalty was reduced to $0 in a previous round of legal wrangling, but the rest of the law was left intact.

1099 contractors and small business owners who would otherwise have limited access to healthcare may soon face an all-new upheaval if the Supreme Court, joined by recent Trump appointee Brett Kavanaugh, finds in favor of Texas in this matter. 

In theory, the Court has the ability to strike down the entire ACA at any time.

While the Supreme Court may use its discretion in some ways – for example, mandating that the law go out of effect at the end of the year or start of the new year – it is just as likely contractors will wake up to find they no longer have healthcare in the midst of the greatest public health crisis in a century.

What Should Small Business Owners And 1099 Contractors Do About Employee Benefits?

The Affordable Care Act was signed into law on March 23, 2010. Almost to the day, ten years later, the first “shelter in place” orders around coronavirus went into effect. The San Francisco Bay Area was the earliest to move on shelter in place, with orders going into effect on March 17.

Even though the ACA has been around for a relatively long time, it’s important for small business owners not to become complacent. The Affordable Care Act and its Federal Marketplace may not be the face of employee benefits for very much longer. In fact, this could turn into a case of “here today, gone tomorrow,” injecting even more uncertainty into a tense situation.

The Supreme Court starts its next session on Monday, October 5. 

Depending on the order in which the Court works through its caseload, it’s very likely that we will see a ruling that permanently alters employee benefits before the presidential election. While electoral politics may change the way things play out in coming years, this confrontation is set in stone – and it is impossible to know how the Justices will rule.

With that in mind, a savvy business owner should work to prepare for change.

ACA alternatives are available, even for business owners whose income currently precludes them from getting a subsidy on the Federal Marketplace. Favorable terms are available especially to those who have moderate to no health conditions at the present time.

The current situation has shown that even young and healthy Americans need to be alert to how healthcare access affects them. Anyone can get sick, and anyone can need care. However, it’s important not to build your employee benefits on shifting sands. While the ACA may not last, there are options that will be there for you through these trying times.