What's next for health reform?

• Author: Barlas, Stephen
• Position: HEALTH CARE

Companies starting to digest the mammoth health-care reform bill, the Patient Protection and Affordable Care Act (PPACA), have likely stocked up on big bottles of antacids. But many of the provisions with the earliest implementation dates will cause little indigestion. Those that generally go into effect for plan years starting after Sept. 23, 2010 will impose mostly administrative requirements on corporate plans.

In a few cases, there are modest cost implications and, in some limited instances, companies may have to redo some aspects of their plans, mostly for high-paid executives. But no relatively large company--self-insured or fully-insured--is going to choke on PPACA, at least not in the early stages of implementation.

Small companies, however, may gag on some steep premium increases on the next date of policy renewals, owing to near-term mandates PPACA puts on insurance companies.

Mike Thompson, principal in the Human Resources Services practice of PricewaterhouseCoopers LLP, says that, "In general, the bill will not be a huge burden in terms of expenditures in the short run, and maybe even in the long run."

He adds that some employers--those with current, tighter eligibility requirements or with large amounts of part-time workers--might find themselves covering more people than they have in the past, which would add costs. In addition, there is the uncertainty about how near-term Department of Health and Human Services (HHS) guidance will parse terms used in the bill such as "grandfathered." (Many provisions have a grandfathered exception--as well as definitions of "essential" benefits.)

Those are just two of the numerous unresolved definitions peppering the hundreds of technical, ill-defined provisions that will necessitate rulemaking at HHS, which in turn will lean for some expertise on the federal Treasury and Labor departments. "People are not appreciating how much of this law we won't know for a long time," says Susan Relland, counsel at the law firm of Miller Chevalier and a board member at the American Benefits Council.

What is known is that insurance companies, because of new coverage mandates imposed on them by PPACA, may well be jacking up premiums, a near-term impact that was neither anticipated nor mandated by Congress. Post-PPACA legislation to correct that and other deficiencies is already in the offing.

A Senate committee held hearings April 20 on the Health Insurance Rate Authority Act of 2010 (S. 3078), which gives...