Today, the Congressional Budget Office (CBO) issued an updated report on the Affordable Care Act’s (ACA) impact on the labor market and insurance coverage. In its February 2014 budget outlook, CBO estimates that the ACA could lead to a loss of about two million full-time equivalent jobs in 2017, rising to about 2.5 million in 2024.1 Although the CBO projects that total employment (and compensation) will increase over the coming decade, that increase will be smaller than it would have been in the absence of the ACA. According to the CBO, the decline in full-time equivalent employment stemming from the ACA will consist of some people not being employed at all, and other people working fewer hours. This is a substantial increase from its prior 2010 projection. The CBO previously estimated that the ACA would reduce household employment in 2021 by about 800,000 individuals. The CBO’s current estimate for 2021 is a reduction in full-time equivalent employment of about 2.3 million individuals.
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Supreme Court Enjoins Federal Government From Enforcing Birth Control Mandate As to Religious Institutions
On New Year’s Eve 2013, Supreme Court Justice Sonia Sotomayor—who acts as the “Circuit Justice” to the U.S. Court of Appeals for the 10th Circuit —temporarily enjoined the imposition of a federal mandate that certain religious employers either (1) provide insurance coverage including birth control to their employees; or (2) sign and execute a form allowing a third party to provide that coverage to their employees. After weeks of speculation as to whether the injunction would soon be lifted, the full Court issued its ruling on January 24, 2013, holding that the injunction would continue during the pendency of a federal lawsuit in the District Court for the District of Colorado.
Workplace Policy Institute: A Look Ahead to Legislative and Regulatory Changes in 2014
The government is divided, congressional midterm elections are looming, and the President is approaching “lame duck” status. Although this political landscape may lead employers to assume that 2014 will be a quiet year on the legislative and regulatory front, the year ahead is shaping up to bring significant changes to workplace policy at the federal as well as state and local levels. The year began with President Obama announcing a renewed focus on income inequality.1 Pushes to increase the minimum wage and extend unemployment benefits are clear examples of this agenda. Yet other, less obvious, legislative and regulatory proposals impacting employers may well accompany the focus on income inequality. With Congress effectively deadlocked by a Republican-controlled House and a Democrat-controlled Senate, the administration will look past Congress to advance its agenda. At the same time, states will continue to look past Washington to enact changes in workplace policy. Accordingly, 2014 looks to be anything but quiet with respect to employment, labor, and benefits policy. Amidst the specter of the Affordable Care Act (ACA) implementation, employers should prepare for new requirements coming from Washington and around the country.
Legal Alert: Volunteer Hours of Firefighters and Emergency Responders Can be Excluded from ACA’s Shared Responsibility Calculation
Executive Summary: The Department of Treasury has posted a statement on its blog indicating that the volunteer hours of volunteer firefighters and volunteer emergency medical personnel do not need to be included in determining whether the employer meets the 50 employee threshold for the Affordable Care Act’s (ACA) shared responsibility provision.
DOL Issues FAQs on the Affordable Care Act, Mental Health Parity Implementation
The Department of Labor’s Employee Benefits Security Administration (EBSA) has issued the latest in its series of Frequently Asked Questions (FAQs) on the Affordable Care Act’s (ACA) implementation. The latest guidance (Part XVIII) addresses questions on coverage of preventive services and limitation on cost-sharing requirements under the ACA. The FAQs also provide guidance on expatriate plans, wellness programs, fixed indemnity insurance and the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).
HHS Delays Online Enrollment in Federal SHOP Exchange by One Year
The Department of Health and Human Services (HHS) recently announced that it will delay online enrollment in the federal Small Business Health Options Program (SHOP) Exchange for one year, until the open enrollment period for 2015, which begins November 2014. Administration officials stated that the decision was necessary as they prioritized fixes to the individual health exchange. The delay will apply to the nearly three-dozen states that declined to establish a SHOP Exchange and are relying on the federally established Exchange.
Four Headaches Facing Multistate Employers in the U.S.
With much of the focus on the federal healthcare law, the Patient Protection and Affordable Care Act, and other federal initiatives (or the lack thereof due to political constraints in Congress), it is often all too easy for employers operating in multiple states to overlook the need to familiarize themselves with the many state laws to which they are subject. Alternatively, multistate employers may very well know they need to keep their eye on state laws throughout the country – but quickly become overwhelmed by the sheer number of rules and regulations coming out of the states in which they operate. Understanding how those laws may interact with or alter the effect of federal law may be as equally complicated. Littler attorney Erin Reid-Eriksen was recently interviewed by XpertHR and noted the following current and pressing issues weighing upon multistate employers:
Lawmakers Introduce Bill Preempting ACA Union Plan Exemption
Senators John Thune (R-SD), Lamar Alexander (R-TN) and Orrin Hatch (R- UT) introduced a bill (S. 1724) yesterday that would prevent the administration from exempting multi-employer health plans from a $63 reinsurance fee the Affordable Care Act (ACA) will impose on each enrollee in self-funded and fully-insured health plans beginning in 2014 through 2016. Unions – whose members typically rely on multi-employer health insurance plans – have been vocal in their criticism of provisions of the ACA.
President, Congress React to Health Insurance Policy Cancellations
In the wake of a political firestorm brewing around cancelations of individual health insurance policies, last week President Obama announced a rule change that would potentially allow some individuals to remain on their current health insurance policy for an additional year. The White House “fix” announced last Thursday would permit insurance companies to continue to offer such policies to individuals for another year, even though the policies do not meet the minimum standards required by the Affordable Care Act (ACA). The announcement came amidst sharp criticism of the President’s pledge that people would keep their existing coverage if they liked it and the day before the House voted on a broader measure.
Five Appellate Court Decisions Regarding The ACA Birth Control Mandates Have Created A Deep Circuit Split, Increasing the Odds for Supreme Court Review
We previously described and analyzed the U.S. Court of Appeals for the Tenth Circuit’s en banc decision in Hobby Lobby Stores, Inc. et al. v. Sebelius, No. 12-6294 (10th Cir. June 27, 2013), which held that for-profit religious employers possessed standing under the Religious Freedom and Restoration Act (RFRA) to challenge certain birth control mandates contained in the Patient Protection and Affordable Care Act (ACA). The mandates generally require employers to provide some methods of birth control—such as Plan B and intrauterine devices—that arguably prevent implantation of a fertilized egg. As we noted, the RFRA provides, as a general rule, that the federal government “shall not substantially burden a person’s exercise of religion.” Since the Hobby Lobby decision was issued, four federal appellate courts have also addressed whether the RFRA or the First Amendment’s Free Exercise Clause allows for-profit employers to challenge the birth control mandates contained in the ACA, and the U.S. Supreme Court looks likely to take up the issue soon.
Legal Alert: Affordable Care Act Transitional Policy for Individual and Small Group Plans
Executive Summary: On November 14, 2013, the Obama Administration announced a transitional policy, whereby insurers may, but are not required to, renew existing health plans in the individual and small-group markets in 2014, even if those plans do not meet the market reforms and plan design requirements of the Affordable Care Act.
IRS Modifies “Use-or-Lose” Rule For Health Flexible Spending Arrangements
In the recently released Notice 2013-71, the Internal Revenue Service (IRS) modified the rules for flexible spending accounts (FSAs). As previously applied, the rules did not allow for carryover of employee salary reduction contributions, otherwise known as the “use-or-lose” rule. The Notice permits cafeteria plans to be amended to allow for a carryover of up to $500 remaining at plan year end into the next plan year to pay or reimburse plan participants for qualified medical expenses, provided that certain requirements are met. The Notice also clarifies the scope of transition relief that allows for greater flexibility for individuals who desire changes in salary reduction elections for accident and health plans for non-cafeteria plan years beginning in 2013. These changes and clarifications were prompted by questions that arose under the Affordable Care Act (ACA).
Agencies Issue Final Rules Governing Mental Health Parity and Addiction Equity Act
The Departments of Labor, Treasury, and Health and Human Services have released final rules implementing the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), which requires parity between mental health or substance use disorder benefits and medical/surgical benefits with respect to financial requirements and treatment limitations under group health plans and group and individual health insurance coverage.
Legal Alert: Health Care Reform Provisions for 2014 and Beyond
Executive Summary: Earlier this year, the Obama Administration delayed implementation of the employer mandate, a major provision of the 2010 health care reform law (the Affordable Care Act or “ACA”). The delay of the employer mandate, however, did not impact other provisions of the ACA, many of which are going forward as scheduled. Additionally the reprieve may be short-lived because, unless additional guidance is issued, January 1, 2014, will start the clock on determining an employer’s size for purposes of the employer mandate, and for determining which employees will be considered full- and part-time for purposes of offering health care coverage.
House Committee Seeks Answers on Affordable Care Act’s Funding of Worker Centers
On November 1, key House lawmakers sent a letter to the Secretary of the U.S. Department of Health and Human Services, requesting information on Affordable Care Act funding of so-called “worker centers.” Worker centers, also known as Union Front Organizations (UFOs), are typically non-profit organizations that offer a variety of services to their members, including education, training, employment services and legal advice.