Garrett Fenton Comments on PPACA in Federal Tax Weekly

"Experts React to Supreme Court’s Health Care Decision"
Federal Tax Weekly
07.06.12Garrett Fenton commented on the impact of the Supreme Court’s decision to reject challenges to the constitutionality of the Patient Protection and Affordable Care Act (PPACA).

“As for the future of the Affordable Care Act (ACA), the President has indicated a willingness to ‘improve’ the law, while Republican leaders (including presumptive presidential nominee Mitt Romney) have continued to call for its repeal,” Fenton said. “While it appears that the law is not going away anytime soon, it remains to be seen precisely how the ACA—and particularly the Supreme Court’s classification of its individual mandate penalty as a ‘tax’—will shape the future political debate surrounding health care and tax policy.”

Regarding the employer mandate, Fenton said, "Now that the Supreme Court has upheld the constitutionality of the Patient Protection and Affordable Care Act (ACA), employers will need to ensure that they are prepared to move forward in implementing its provisions, and particularly those that are becoming effective in the near term. While 2014 will be somewhat of a banner year in terms of the sheer number of ACA provisions taking effect, there are many requirements that will become effective even sooner," he said. "For example, some employers that maintain group health insurance policies will be receiving medical loss ratio (or MLR) rebates from their insurers later this summer, which could implicate a host of ERISA fiduciary, employee income tax, and employer payroll tax, withholding, and reporting issues. Most employers will also need to begin issuing comprehensive summaries of benefits and coverage (or SBCs) to employees, in connection with the upcoming open enrollment period for their health plans."

As to Flexible Spending Accounts (FSAs), Fenton said, "Employers will need to begin limiting to $2,500 the annual salary reduction contributions that employees can make to their health flexible spending arrangements, and many employers will be required to begin paying the federal government an annual, per-covered-person fee for comparative effectiveness research."
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