King vs. Burwell: “Big Hat…No Cattle”

The recent opinion from the Supreme Court on King vs. Burwell reminds me of the old Texas phrase “Big Hat… No Cattle” It was used to describe someone who wanted to play the role of a big influential cattleman but in actuality had no cattle. There have been 50 votes in the house, 2 major lawsuits and an outcry to change the Affordable Care Act. But Congress (now that Republicans control both houses) won’t either through a formal vote or through budget allocation processes in the senate work to defund or repeal this law. All I can say is “Big Hat…No Cattle”. At this point it is important to remember that the subsidies offered to the “State” by the federal government is for 3 years only. Meaning that the funding then transfers to the states budgets after this 3 year period. This was a fundamental reason that many Governors chose not to implement the program. The coming combination of rate increases, the burden of funding to change to states and the reporting requirements and penalties many employers will be facing will compel change, or denial and increased funding, I am not sure which one but just remember “Big Hat…No Cattle”.

SCOTUS rules on King vs. Burwell

The Supreme Court, in a 6-3 opinion upheld the provision in the Patient Protection and Affordable Care Act (PPACA) that allowed funding premium subsidies through both federally funded and state funded exchanges. The interpretation of the word “State” was cited in Chief Justice Roberts’s opinion and was interpreted to mean any exchange. This means that there will be no change in the law as a result of the case and employers and individuals will proceed as they have over the last 5 years by implementing and complying with the law. In the dissenting opinion authored by Justice Scalia he said “that this law should now be called SCOTUS CARE”. Speculation says he has said this because of the way the court has interpreted arguments and words in the law both in 2012 and now. In both situations the Court has set the precedent. If the Supreme Court likes the law but not the wording they have freedom to redefine the words or introduce non-argued arguments to provide their desired interpretation.

The ACA, DOL, EBSA and IRS: "What am I missing...?"

The biggest fear with any new law is what you don't know or, worse, what you missed. Complying with the Affordable Care Act (PPACA) is the same... With the first period of implementation for groups that are 100 employees or more over, the question now is "did you do it right?" In any sport, whether it is individual or team oriented, the best in class always review what they did and how they can improve. It's tough for a business to do this process proactively since typically, customer reaction drives the review process.

I believe it is better to offer a continual review and reflection on what and how to do things better to my clients. The alternative is to create a protected wall around me that simply seals my own fate because I wouldn't ask myself "What am I missing?".

Take, for instance, the recent increase in staffing for the enforcement portion of ERISA and the Affordable Care Act. So the enforcement agencies are hiring more staff and/or are asking for more staff..."What am I missing?". I'm guessing that the compliance factor for employers around these laws are what I call "gapped" - that is, the reality of what documents need to be in place compared to the reality of what documents are in place is large enough to compel the increased labor cost.

I understand I'm projecting business ideas on to the Federal Government, but if the decision process did occur this way, imagine how big the chasm really is for it to be seen by them?

So what is the answer to my question, "What am I missing?"

The answer is that it's time to review your performance on the documentation end of your Health & Welfare plan. The penalties here aren't just 15 yards, or a 5 second delay, they are real dollars with real implications on your business, and you don't get a warning  from these agencies saying "Hey, just wanted you to know that we may be asking for these documents from you in the next couple of weeks". They just show up or call. So if you're saying to yourself, "what the hell are these documents?", give me a call. We'll found out what you're missing together.