This morning, in a controversial 5-4 vote, the U. S. Supreme Court upheld the Affordable Care Act (ACA) in its entirety, with the exception that the federal government's power to terminate states' Medicaid funds is narrowly read. Although the ACA has already significantly affected employers, we now know that employers will need to comply with ACA's more controversial provisions - including the individual mandate.

Individual Mandate. Beginning in 2014, employers with 50 or more employees that do not offer coverage to their employees will be subject to penalties if the employee receives a government subsidy for health coverage. The amount of the penalty depends on the employer's individual circumstances, but could exceed $2,000 per employee. Further, employers will be required to report the health coverage they provide to the federal government.

Small Business Health Care Tax Credit.This credit provides qualifying employers with a tax credit (up to 35% of the employer's contribution for healthcare). To qualify, an employer must be either a tax-exempt organization or a "small business," meaning the employer must (1) pay at least half the cost of qualified employee-only health insurance coverage for their employees; (2) employ fewer than 25 full-time equivalent employees; and (3) pay wages averaging less than $50,000 per employee per year. As a result, employers who were claiming the credit may continue to do so and those who are eligible but do not should begin doing so immediately using Form 8941.

Uniform Summary of Coverage & Advance Notice of Plan Changes. Employers must provide these four-page "summaries" to health care plan participants by September 23, 2012, which generally summarize the care available under the plan. Note that noncompliance may be costly - the current penalty for Uniform Summary of Coverage noncompliance is $1,000 per enrollee. Further, employers must provide health care plan participants with 60 days advance notice of any material changes in health care availability and/or coverage.

Of course, the upcoming presidential election could alter ACA's current state - if President Obama is not reelected, his successor could repeal those provisions that the Court upheld. However, employers should begin preparations to comply with ACA immediately by attending our informative webinar on July 10 (register below).

Download Supreme Court Decision

For questions regarding these or other provisions of ACA and the impact of the Court's decision, please contact WS Attorney Peter E. Hansen at (262) 560-9696, or email pehansen@wesselssherman.com.