Thursday, June 28, 2012

What Does The Supreme Court Obamacare Decision Mean For Construction Businesses?

In a 5-4 judgment accompanied by 193 pages of a very confusing network of concurring and dissenting opinions, the United States Supreme Court this morning upheld all but one part of the Obama administration’s signature health care reform initiative passed by Congress in 2010. The Court’s judgment strikes the Obamacare provision penalizing states which decide not to join in the new law’s expansion of Medicaid assistance to the needy. Everything else is left intact.

Of course, the Republican Party’s political attacks on Obamacare are continuing, with presidential candidate Mitt Romney vowing to sign legislation repealing Obamacare in its entirety should he be elected and his party take control of both houses of Congress in the November election and send a repeal bill to him in the Oval Office. Unless that happens, Obamacare is now clearly the law of the land, and it’s time to think seriously about how it is going to affect your construction business.

Here’s the scoop:

1.    The already effective prohibitions on denying coverage to children for pre-existing conditions, and requiring insurers to let parents keep their children covered until age 26 remain in effect.
2.    As of 2014, everyone will be required to buy health insurance – individually or through an employer – or pay a penalty about equal to the cost of obtaining health insurance.
3.    As of 2014, no one can be denied coverage due to a pre-existing condition.
4.    As of 2014, annual policy limits on coverage are eliminated.
5.    As of 2014, lifetime policy limits on coverage are eliminated.

If you are in the construction business, and employ union skilled labor, you will still have to pay into union health and welfare funds, but the per-tradesperson cost of participation may go down a little bit. If your company already provides health insurance for you and your family, and the non-union employees in the office and in the field, your per-person and per-family premiums may also go down a little. If your company does not currently provide health insurance for non-union employees, it might become economically feasible for you to do so when the penalty for not having coverage kicks in in 2014. If everybody in the company needs to participate, your group may get large enough to save everyone some money on health coverage through the company rather than in the individual market.

Either way, if you have coverage through your company for yourself and your family, but not for other non-union employees, you still won’t be able to deduct health insurance premiums as a business expense on your business tax return.

Lawyers, politicians, pundits and other folks will be debating the intricacies of the Court’s 193 pages of legal jargon for weeks and months to come. The law will remain a campaign issue right through the November elections, with Republican candidates hollering for repeal, and Democratic candidates screaming doomsday for health care if Republican’s win the election. Whether or not the new law is repealed after November, the effect on your construction business will be minimal either way: if Obamacare remains in effect, your business might save a few bucks on health coverage for you and your employees; if not, nothing changes except that preexisting condition exclusions, annual policy limits and lifetime policy limits won’t be going away. All in all, it’s much ado about nothing.

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