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Obama Victory Ensures ACA's Future; Employer Groups, Unions Focus on Economy

Friday, November 9, 2012

President Obama's re-election Nov. 6 ensures that the health care reform law and pension proposals will continue to be implemented, sources told BNA, while business groups and unions said they will remain focused on the economic turnaround.

Obama's re-election means that the next crucial milestone for implementation of the Affordable Care Act will be in 2014, the year the exchanges are scheduled to be up and running and Medicaid coverage expanded, with much of the work to meet that deadline occurring between now and then.

Implementation to Proceed.

The ACA has now survived attempts by the Republican-controlled House to dismantle it, a ruling from the U.S. Supreme Court on its constitutionality, and a presidential election. Both supporters and opponents of the law told BNA they expect implementation will now go forward unimpeded.


 

“It's now very clear that the Affordable Care Act is in fact going to stay law and [that's] going to remove any doubt on the part of employers about the actions that they need to take,” said Paul Hackleman, an analyst at the International Foundation of Employee Benefit Plans.  

 


The House will remain in the hands of Republicans as a result of the election, so observers predicted more oversight of the health law in that chamber. But the Senate will remain controlled by Democrats, so any attempt to make big changes in the law likely would be stopped there, they added.

“In terms of derailing the law, it's done; there's no pulling it apart,” said Julius W. Hobson Jr., senior policy adviser at Polsinelli Shughart in Washington, D.C.

Even if an opponent of the law is elected president in 2016, its key features will already have been implemented, and “you can't unwind it,” he added.

But Hobson said he expects the House will engage in “rigorous” oversight of the law.

Paul Hackleman, health care and public employer analyst at the International Foundation of Employee Benefit Plans, said there were “two hurdles” the ACA needed to clear in order for employers to feel confident in implementing upcoming provisions of the law. The first hurdle was cleared on June 28 when the Supreme Court upheld the law (30 HRR 707, 7/2/12), and the second hurdle was cleared by the election results, he said.

“The Republican Party had made it very clear that repealing the ACA was a priority. So if the Republicans had won both the House and the Senate, I think there would have been a strong likelihood that there would have been a repeal, or a significant reduction in what the act provided,” Hackleman said.

“It's now very clear that the Affordable Care Act is in fact going to stay law and [that's] going to remove any doubt on the part of employers about the actions that they need to take,” he said.

Hackleman said that, with the election settled, “employers are now unencumbered in terms of their ability to go ahead and proceed with complying with the ACA.”

'Law of the Land.'

“Conservatives are well-aware of the fact that Obamacare is here to stay,” said Avik Roy, a senior fellow at the Manhattan Institute, a right-leaning think tank. “Obamacare is the law of the land,” he said.

Roy also predicted the House will continue to hold hearings about the law's implementation.

“It has been far from a hiccup-free implementation,” he said.

Observers said the ACA faces numerous challenges being implemented during the next 14 months. Many states have not taken action linked to creation of health insurance exchanges, and states also must work to expand Medicaid coverage mandated under the law.

Some states were waiting for the presidential election to decide whether they would have to create an exchange. Now they must quickly decide whether to create an exchange or allow the federal government to do so for them.

The advocacy group Families USA said in a Nov. 7 statement that one of the biggest challenges facing the law will be enrolling tens of millions of uninsured people in new health coverage.

The Washington, D.C., consulting firm Avalere Health said in a Nov. 7 analysis that ACA implementation will go into high gear now that Obama has been re-elected.

Nov. 16 Deadline on Exchanges.

States by Nov. 16 must notify the federal government about their plans to implement exchanges, and Avalere said it expects that 20 states will likely operate state-run insurance exchanges in 2014; 13 will likely use a partnership model with the government; and more than a third of states will likely default to the federal exchange.

“To date, six states have indicated that they do not plan to implement Medicaid expansions and several more have been leaning against expansion, but some states may change their decisions now that the elections are over,” the analysis said.

The U.S. Supreme Court gave states the option of participating in the ACA's Medicaid expansion as part of its landmark health care decision in June.

“Avalere anticipates that [the Centers for Medicare & Medicaid Services] will offer states flexibility to partially expand Medicaid to encourage program participation and most states will only expand [coverage] to 100 percent of poverty--shifting those above the poverty line into subsidized exchange coverage,” the firm said.

Jennifer Butler, senior policy adviser at Alston & Bird, said during a Nov. 7 webinar sponsored by the Premier healthcare alliance that, with the election over, the Department of Health and Human Services likely will issue numerous rules during the next several weeks regarding ACA implementation, including one governing the essential benefits package.

Retirement Proposals.

Obama administration proposals designed to improve Americans' retirement security also will move forward in the wake of his re-election, but some aspects of the private retirement system could still face threats from tax reform efforts, retirement groups and practitioners told BNA Nov. 7.

The Department of Labor's re-proposal of the definition of “fiduciary” under the Employee Retirement Income Security Act will stay on track, as will the administration's initiative to provide standards for estimating retirement income from 401(k) plan benefits, they said. However, there was a sharp difference of opinion as to whether 401(k) plans, the main form of retirement saving for many Americans, could take a hit if tax reform comes to fruition.

But there is much uncertainty, as retirement policy took a back seat for much of the presidential campaign.

“Retirement was surprisingly sort of a hidden issue in this election,” said David Madland, director of the American Worker Project at the Center for American Progress.

However, Madland said he sees “a potential bright spot” for retirement policy getting the attention he thinks it deserves.

“A large part of this election was about the fate of the middle class and which presidential candidate would do a better job for the middle class,” Madland said. “If you look at middle-class worries, retirement is among the very top issues, so there is some sense that retirement could be a big issue down the road,” he said.

American Benefits Council President James A. Klein said he is optimistic that the election results will bring both parties together to address big issues, including retirement issues. “Things change in the second term of any president. [The president] is freer to move toward the other party, and other party is freer to move toward him … in addressing some of the bigger issues,” he said.

The “status quo” results of the election ensured that DOL's major regulatory initiative to redefine the term “fiduciary” under ERISA Section 3(21)(A) is still on track, said Brian H. Graff, executive director and chief executive officer of the American Society of Pension Professionals and Actuaries.

“They are going to continue with their definition-of-fiduciary reg, which is very controversial. Ultimately, it may be that Congress has to step in and address the issue. So that's going to be very contentious, and I don't think that's going to change,” Graff said.

The re-proposal could be ready for the public as early as January, according to Oct. 23 remarks from Phyllis C. Borzi, assistant secretary of labor for DOL's Employee Benefits Security Administration. Speaking at the American Council of Life Insurers' 2012 Annual Conference, Borzi said the retirement community could expect the re-proposal to be issued in early 2013 (30 HRR 1159, 10/29/12).

Edward Ferrigno, vice president of Washington affairs at the Plan Sponsor Council of America, agreed that the fiduciary re-proposal is inevitable now, saying, “you have to assume that the DOL's regulatory agenda will move forward, obviously, the fiduciary rule being the number one issue.”

Economic Considerations.

Several business groups, meanwhile, pledged Nov. 7 to work with the administration and suggested strategies for stimulating the nation's economy. They also urged lawmakers to put aside political differences and collaborate on fiscal issues.

“The time for politics is over. The time is now for governing,” Greg Casey, president of the Business Industry Political Action Committee, said in a teleconference the day after the election.

“The mandate is to come together to solve” the nation's economic problems, Casey said.

Jay Timmons, president of NAM, told the teleconference audience that 6 million jobs could be lost in the United States by 2014 unless timely action is taken. He urged reform of entitlements and spending as well as of the tax system.

Thomas J. Donohue, president and chief executive officer of the U.S. Chamber of Commerce, issued a statement Nov. 7. “It is the government's responsibility to work on a bipartisan basis to pass policies that will unleash the private sector and help put Americans back to work,” Donohue's statement said.

“Now that the election is behind us, the most urgent matter facing the president and the outgoing Congress is to take action before January 1 to stop massive tax increases and indiscriminate spending cuts, which could push our economy back into a recession,” he said.

AFL-CIO President Richard Trumka said Nov. 7. that the margin by which union members voted for President Obama was decisive in his re-election in a number of battleground states, including Ohio, Wisconsin, and Nevada.

During a news conference at AFL-CIO headquarters, Trumka said that 65 percent of union members nationwide voted for Obama.

And while the election is over, Trumka said, labor's work is not finished. The labor movement now is focused on the lame-duck session and the fiscal showdown with Congress, he said.

Joe Hansen, president of the United Food and Commercial Workers, said in a Nov. 6 statement that there is much more to be done in the president's second term. “It is time for immediate and bold action to create good-paying jobs,” Hansen said. “It is time for a tax code that is fair and helps close the gap between the rich and the poor. It is time to strengthen our labor laws so workers can join a union freely and fairly. And it is time to reform our immigration system so those who work hard and play by the rules can become American citizens. Only then can we truly recognize the President's vision of shared prosperity and shared sacrifices.”

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