Health Insurance Plans and Employment Law
Update: June 28, 2012 – U.S. Supreme Court Upholds Health Care Reform Law
On March 23, 2010, President Barack Obama signed the Patient Protection and Affordable Care Act (PPACA) into law, and on March 30, 2010, he signed the Health Care and Education Affordability Reconciliation Act of 2010 (HCEARA), which contained amendments to the PPACA, into law. The two laws make up an expansive health care reform package that will have many far-reaching effects on employers. While many changes that affect employers would go into effect in 2014 others will happen soon. Read the latest news on health care reform
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American Recovery and Reinvestment Act of 2009
On February 17, 2009, President Obama signed a stimulus bill called the American Recovery and Reinvestment Act of 2009 (ARRA), into law. ARRA contains several provisions relating to health care benefits including:
- COBRA subsidy. Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), an individual may usually keep health coverage through a previous employer’s health plan for up to 18 months by paying 102% of the cost of coverage. Under the ARRA, the federal government paid 65% of COBRA premiums for up to nine months for employees who were involuntarily terminated between September 1, 2008, and December 31, 2009. Congress has extended and expanded the subsidy three times since ARRA was enacted (in December 2009, March 2010, and April 2010).
- HIPAA changes. The Health Insurance Portability and Accountability Act (HIPAA) was originally passed in part to address another area of employee concern about health benefits — whether they could obtain coverage for health conditions they or their families had before they obtained benefits under a new health plan. The ARRA expands HIPAA’s privacy and security regulations, and under the stimulus package, business associates of covered entities will be directly subject to HIPAA. The stimulus plan also extensively changes HIPAA on other issues, including security breaches and related notification requirements, the rights of individuals regarding their protected health information, and increased enforcement and penalties for violations.
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Other federal laws regarding health insurance offered by employers
The following is an overview of a few of the other major laws affecting health insurance plans offered by employers.
- ERISA. The Employee Retirement Income Security Act’s (ERISA) main purpose is to protect employees from losing their pensions due to harsh vesting rules or poor management, but the law covers health benefits as well.
- FMLA. The Family and Medical Leave Act (FMLA) gives eligible employees the right to take up to 12 workweeks of unpaid leave during any 12-month period for any of these reasons: (1) to care for their newborn child, (2) for placement of a child for adoption or foster care, (3) to care for a child, spouse, or parent with a serious health condition, (4) to obtain treatment for and recover from their own serious health condition, or (5) for qualifying exigencies that occur when they have a parent, spouse, or child called to active duty in the military.
- Cafeteria plans (Section 125 plans). Cafeteria plans are tax-advantaged accounts that allow employees to pick and choose from a number of different employee benefits they can fund with pre-tax dollars. They’re also called flexible spending accounts (FSAs), or health FSAs if they offer a choice of health benefits.
- Other laws. Other federal laws and regulations dealing with more specific aspects of employer health care plans include the Mental Health Parity and Addiction Equity Act, the Medicare Modernization Act (MMA), and the Uniformed Services Employment and Reemployment Rights Act (USERRA). Several federal laws banning employment discrimination also prohibit discrimination in employee benefits, one of the most important terms and conditions of employment. Such laws include the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964, and the Equal Pay Act.
Same-sex marriages, civil unions, and domestic partner benefits
This area of the law is rapidly evolving in our nation’s courts and legislatures. Laws prohibiting discrimination based on sexual orientation, including domestic partner benefits, appears to be a very hot issue in a number of states. Some states (and even some cities) have legalized same-sex marriages and/or civil unions, while others have amended their constitutions to forbid them. Some organizations, moreover, have chosen to offer benefits to their employees’ same-sex partners, and others cover both same-sex and opposite-sex but unmarried unions.
State laws on employee benefits
States have continued to weigh in on employment and benefits issues. There’s been a steady trend for states to require employers or insurance companies to cover certain medical conditions, with coverage mandates increasing over the years. States also have a history of regulating workers’ compensation insurance, a parallel health insurance system for work-related injuries and illnesses.