Over the last few years, few things have weighed more heavily on employees than health insurance. While most people rely on employer-sponsored health insurance policies, a rough job market has left an increasing number of Americans without traditional health insurance in the midst of a public health crisis.
Employers have also been thinking about health insurance, specifically how it relates to their benefits and compensation structure. Surveys show that most employees take health insurance into account as they make employment decisions – it is, by far, the most influential employee benefit.
But delivering that benefit in a way that aligns with regulations is not always easy.
High net worth entrepreneurs who do not qualify for healthcare subsidies have been turning to alternatives to keep their costs down. Those who must provide health insurance to their workforce under ACA guidelines have been thrown into a tailspin as efforts to revoke the ACA have been raised and foundered over and over.
Those who are hedging their bets on health insurance should take heed: New information out of the Supreme Court suggests changes to healthcare regulations will be much more subtle than once thought – or they may not materialize at all. For business owners, this may effectively leave the status quo in place.
What’s Going On At The Supreme Court And How It Affects Business Health Insurance Strategy
As Donald Trump leaves the presidency behind, his selection of three Supreme Court justices stands to be his most enduring legacy. Republicans have long considered the elevation of justices as the key to achieving a range of policy goals, among them the elimination of the Affordable Care Act.
The ACA stipulates the minimum amount of care a health insurance policy should provide for. It also defines a number of protections, allowing those with “pre-existing” health conditions to access health insurance without paying penalties or risking the loss of their plan.
ACA protections have been good for many Americans, but the law has had mixed results for business owners.
With new rules about the health insurance employers must provide, small and mid-sized firms have been feeling the volatility of the healthcare market in new ways. Ongoing efforts to eliminate the ACA have added greater uncertainty, with many assuming it would ultimately be struck down.
However, even with the current conservative tilt of the court, that no longer appears certain.
Over the last few months, ACA news has been dominated by California v. Texas as state attorneys general have argued that the Affordable Care Act should be struck down. The crux of the argument is that the law cannot stand without a piece called the individual mandate, which requires those who do not have an employer-based plan to buy insurance on the ACA marketplace or pay a penalty. The penalty is currently set at $0.
While this argument would give a sympathetic Supreme Court the power to completely invalidate the law, early hearings on the matter don’t suggest that the justices are eager to do so – even those recent Trump appointees.
Justices Are Skeptical Of Claims That The ACA Must Be Eliminated
At the center of the argument is the question of whether the individual mandate is “severable” from the rest of the law. Severability is a concept in contract law that means one part or provision of a contract can be removed while the rest of it remains enforceable. If a court finds a provision inseverable, eliminating that one section causes the entire agreement to lose its legal power. Although there are separate arguments being made about the mandate’s constitutionality, their effect on the law as a whole depends on this point.
After months of anticipation, the Supreme Court heard two hours of oral arguments about the ACA on November 10, 2020. Many justices, including conservatives, expressed skepticism at the idea that the entire Affordable Care Act should be nullified – opting to read the individual mandate as severable.
Supreme Court precedent strongly favors severability as a general rule. What’s more, the Court must take into account the intent of Congress when writing a law and taking subsequent actions affecting it. Congress had the opportunity to repeal the law when the mandate penalty was reduced to zero, but did not.
Chief Justice John Roberts was perhaps most plain about the impact of the case:
“I think, frankly, they wanted the Court to” repeal the ACA, he said, “But that’s not our job.”
What It Means For Businesses Navigating Health Insurance In 2021 And Beyond
Discussion around the Affordable Care Act is far from over. California v. Texas continues, and a verdict is not expected until spring of 2021. But the optics of millions of Americans losing health insurance during a global pandemic have changed the equation. Likewise, attorneys general advocating for ACA repeal will lose federal support in early January, when President-Elect Joe Biden is sworn into office.
With all these factors in mind, odds are lower than ever that the Affordable Care Act will be invalidated.
Open enrollment for ACA health coverage ends on December 15. It is assumed that health insurance acquired under current guidelines will continue to function as normal. “Business as usual” is the watchword for 2021. Any further seismic changes in the law’s status after spring now seem unlikely.
The incoming administration has also stated that it will seek to strengthen the Affordable Care Act further.
Going into 2021, business owners should keep an eye on the Supreme Court but continue to plan around their regulatory requirements under the ACA. Future stimulus agreements in Congress could alleviate the strain on businesses and individuals paying too much for healthcare, but basic requirements are likely to stay intact.
If You Are An Entrepreneur Who Doesn’t Qualify For ACA Subsidies, Take Action Today
Many successful business leaders who operate as contractors earn too much money to enjoy health insurance subsidies under the Affordable Care Act. There is little evidence that this situation will change in the near future. The next few years may even see the return of the penalty for those who do not hold a health insurance policy.
That means now is an opportune moment to protect your interests when it comes to health insurance.
Before the regulatory landscape shifts again, it’s time to take a close look at all of your options for protecting your health and your assets. If you cannot qualify for an ACA subsidy right now, but you are in good health with few or no pre-existing conditions, you may save money with an ACA alternative health insurance plan.
It might seem like your health insurance options are more limited than ever, but nothing could be further from the truth. ACA alternative health insurance plans are available to meet your needs and your budget – so you can get the kind of care you want in a way that makes sense for your business.
To find out more or get started, contact us today.