Why should employers pay attention to state-based health reform?
Employers are all too familiar with the complexity of managing one set of federal healthcare compliance and reporting requirements. Now, imagine the burden of trying to follow, track, comply, and potentially administer a different set of requirements in every state where your business operates.
With new powers granted to states and proposed changes to the Affordable Care Act (ACA), that’s what the future may look like.
Although it’s unlikely that an ACA repeal (or “repair” as we are now hearing) and replacement will happen quickly, future changes will most certainly impact both employers and employees. Employers may welcome the regulatory relief of a repeal. However, today’s one set of federally-based regulations might give way to a combination of a national and state-based regulations that could increase the administrative complexity of compliance exponentially. If major changes to the law are made, businesses that operate across state lines should be prepared for a wave of complicated state laws.
Momentum is gaining for state-based regulations
Many states are beginning to take ownership of healthcare into their own hands, looking at their role in supporting the health of their citizens in different ways. Already, 31 states have expanded Medicaid under the ACA, and, 16 have built their own state-based exchange marketplaces.
Beginning January 1, 2017, Section 1332 of the ACA gives states a new way to take control of their healthcare challenges. Under this legislation, states can apply for an Innovation Waiver to create their own solutions to offering quality healthcare within strict guidelines for affordability and comprehensiveness, without increasing the federal deficit. These Waivers can include changes to the Employer Mandate. A number of states have initiated legislation to apply for a 1332 Waiver and four states have submitted Waiver applications to date.
State precedent of healthcare leadership
If the ACA is repealed, some states and municipalities may fill the void with new rules and regulations to maintain and improve access to affordable healthcare. Essentially, each state could create their own versions of affordable care, as several had done before the ACA was enacted in 2010.
Healthcare laws in place in Massachusetts prior to 2010, for example, provided the basic framework upon which the ACA was built. The Massachusetts requirements varied from the ACA in key areas – such as defining full-time employment at 35 hours a week rather than the 30-hour definition in the ACA. If the ACA employer mandate is repealed, Massachusetts could decide to reinstate some of the requirements of its original law.
Proposed legislation adds complexity
Recent ACA replacement proposals are also giving more power to states to choose their own healthcare laws. For example, the Collins/Cassidy Patient Freedom Act repeals Title 1 of the ACA and presents states with three options:
- Reinstate Title 1 and continue implementing the ACA
- Select the preferred State Alternative Option (yet to be defined) to enact a new market-based system
- Design an alternative solution to regulate insurance markets that work for a state’s specific populations, without any federal assistance
Because each state could choose among these options, employers that operate across multiple states may need to prepare to comply with all three if the Patient Freedom Act passes.
Health e(fx) is ready for State-based changes
The nuances of state laws could place significant added burden and complexity on employers who don’t have automated compliance and reporting technology to handle different state-based regulations. The good news is that Health e(fx) technology already supports state-based requirements. Always up-to-date, Health e(fx) cloud technology addresses changes to state and federal requirements as they happen.
Whether facing a state or federal healthcare challenge, Health e(fx) customers can have peace of mind knowing their compliance and reporting is in good hands, and that they will stay in lock step with evolving compliance and reporting obligations.