What Happens If

It seemed like the whole country was following the arguments before the Supreme Court on the Constitutionality of the Individual Mandate in the PPACA – better know as the Health Care Act (or as some like to call it Obamacare).  I do not recall this much interest in judicial proceedings since the OJ Simpson Trial.  We are now waiting to see the Court’s decision, but we will have to wait until the end of June to find out.   Essentially, there are four possible outcomes.

  1. The mandate is constitutional and everything stays just the way it is
  2. The mandate is not constitutional, but it is the only part struck from the law
  3. The mandate is not constitutional and other integral parts are struck along with it
  4. The mandate is not constitutional and so integrated with the rest of the law that the whole law must be struck down

As an accountant I have been told more than once I have no business trying to play the part of lawyer, so I won’t venture any opinions on which outcome is likely, but as accountants we are responsible for helping our businesses make plans.  In this case, those plans include thinking about the “what ifs” if the law is struck down. With 2,700 pages of law and thousands of pages of passed and proposed regulations, the “what if” list is quite long. 

One of the first decisions businesses and insurers will have to make is how to deal with the benefit changes they already made to comply with the law.  Does the business still want to insure dependents of employees up to the age of 26 as was required by the law?  What about reinstituting lifetime coverage maximums?  What changes should be made to preventive care and checkup benefits now that they aren’t required to be without a co-payment?

Another significant impact close to the heart of many CPAs is the elimination of the requirement to include the dollar amount of medical benefits on an employee’s W-2.  Most businesses are well underway with their plans to determine the amount and develop ways to include it on the W-2 since it is currently required to be included on the 2012 W-2s to be issued in early 2013. Another change would be around Flexible Spending Accounts or FSAs.  Under the law the maximum contribution to an FSA would drop to $2,500 in 2013.  Businesses will need to be prepared to modify their annual enrollment process quickly to keep up with the changes. 

As I said, the list is long and I could spend the next ten blogs going over the possible impacts, but I think you get the idea that the Supreme Court decision is of more than a passing interest to CPAs in Business.  The decision will impact budgets, planning and a number of processes, so like the rest of the country we will be waiting, but unlike the rest of the country, we are already starting to think “what if…”

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