LGBT Employees and Benefits: Impact of Marriage Equality

A year after the Supreme Court’s historic marriage equality ruling (Obergefell v. Hodges, June 2015), Lincoln Financial surveyed LGBT employees about their benefits. Since the ruling, 28% of the LGBT community overall, and 35% of those married or in a domestic partnership have reevaluated their workplace benefits, enrolled in a new benefit, or increased their contribution to an existing benefit. Thirty percent are making changes to their workplace benefits as a result of the ruling. But 50% are still unaware of how the ruling affects their benefits. Thirty-eight percent of LGBT employees who are married or in a domestic partnership are not aware how the marriage equality ruling affects their workplace benefits. The study also finds the following:

  • 14% of LGBT employees who are married or in a domestic partnership have enrolled in a new non-medical insurance plan.
  • 11% of LGBT employees have enrolled in a new health insurance plan.
  • 7% LGBT employees have made changes to their retirement plan by enrolling in a new plan or increasing contributions.
  • 51% of LGBT employees would like to speak with someone about their benefits.

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Group Asks Supreme Court to Review Challenge to Employer Mandate

The Association of American Physicians and Surgeons (AAPS) is asking the Supreme Court review a case that challenges the ACA’s employer insurance mandate (Stephen F. Hotze, M.D., and Braidwood Management v. Sylvia Mathews Burwell and Jacob J. Lew). Employer, Braidwood Management, says that it was forced to purchase ACA-compliant insurance at inflated premiums to avoid a $100 per-day/per-individual tax (or penalty). Braidwood Management says that, because of the ACA’s coercive intrusion, it could no longer purchase the pre-ACA low-cost insurance with the options it preferred. The ACA reduced market choices, increased prices, and limited some features that Braidwood Management and its employees valued.

The AAPS says that the mandate is unconstitutional because the Constitution requires all revenue-raising bills to originate in the House of Representatives. AAPS executive director Jane M. Orient, M.D. said, “The ACA is basically the Harry Reid bill. The…ACA was drafted in the Majority Leader’s office, outside the usual committee process. The legislative process [was] reduced to backroom horse-trading to secure the moderate members of the majority caucus without inviting input from the Senate minority.

The Fifth Circuit dismissed the case, saying that the Anti-Injunction Act (AIA) does not allow businesses to bring pre-enforcement challenges to the employer mandate (tax). But attorney Lawrence Joseph argues that the Anti-injunction Act does not apply to regulatory taxes under the ACA, nor does it prohibit challenges to illegal or unconstitutional taxes. Moreover, employers like Braidwood Management have no post-enforcement remedies to recoup a tax they never paid. Finally, even without ruling on ACA’s tax penalties themselves (as taxes), a federal court would have jurisdiction to stop the ACA’s unconstitutional intrusion into the health-insurance marketplace. “Some may say that, after a couple of big setbacks to challengers in the Supreme Court, ACA is here to stay. But because of its sloppy drafting, frenzied enactment, and widespread destructive effects on freedom, the economy, and the practice of medicine, there will be legal challenges as long as it is in effect,” Orient added.

Hospitals Well Positioned for Insurer Consolidation

The for-profit hospital industry is well positioned to weather the wave of mergers and acquisitions (M&A) among the largest for-profit health insurers, but consolidation could have some important longer-term ramifications, according to Fitch Ratings.

M&A activity among health insurers is not likely to result in immediate price pressure for hospitals. In many markets, health insurers are already fairly consolidated. Recent actions by hospitals to build market presence will shore up negotiating power. However, it could hurt the competitiveness of smaller insurers in some markets. It could also accelerate the shift towards value-based payments for hospitals and other healthcare providers.

The merger of Aetna and Humana would create the second largest national for-profit health insurer by revenue. The announcement of the merger comes after some favorable developments for the hospital industry. Most importantly, the Supreme Court recently ruled that public health insurance exchange plans could keep the financial subsidies that make these plans more affordable. In part because of the ACA-related expansion of health insurance coverage, hospitals have recently had more patients. M&A activity among acute care hospitals has given them more negotiating clout. Hospitals have been expanding their presence in key geographies through acquisitions and financial partnerships

Reactions to Supreme Court Subsidy Ruling

The U.S. Supreme Court ruled that nationwide subsidies called for in the Affordable Care Act are legal. The following are reactions from stakeholders:

  • Patrick Burns, president of the California Association of Health Underwriters: The Supreme Court got it right. California has a state-based exchange (Covered California), so nothing will really change here, but the clarification was very important to residents in the 34 states that utilize the federally facilitated health insurance marketplace in some form…Our hope is that state and federal policymakers will now turn their attention on efforts to truly reduce the cost of providing health care, something that the ACA has not fully addressed. Lawmakers and regulators need to look at and improve the portions of our health care system that work well and keep a variety of health insurance product options available to all. The employer-based system has reliably and effectively delivered quality health coverage to generations of Americans. And we as a nation need to work to preserve it.
  • Covered California Executive Director Peter V. Lee: Although Covered California enrollees were not at risk of losing their subsidies as a result of the Supreme Court decision, a ruling invalidating subsidies offered through the federal health exchange could have resulted in changes to the federal law, which could have affected California…The subsidies have helped millions of Americans, including individuals I have met whose lives were saved as a result of the care they received. With the support of federal subsidies, the majority of consumers enrolled with Covered California pay less than $150 per month for their premiums, with many tens of thousands of consumers paying less than $10 per month for coverage.
  • California HealthCare Foundation president and CEO Dr. Sandra Hernández: We hope that this ruling will hasten the conclusion of the seemingly endless political debate about the law. After the ACA was enacted in 2010, California government and industry leaders had the foresight to swiftly establish Covered California. That was a wise decision not only because the exchange now has 1.3 million enrollees, but also because the state exchange insulated Californians from the financial and health risks posed by this legal challenge.
  • The American Academy of Actuaries Academy Senior Health Fellow Cori Uccello: The…ruling upholding…preserved an integral component of the Affordable Care Act and averted significant disruptions to the individual health insurance market. In the loss-of-subsidy scenario, adverse selection would have been a serious concern, as relatively higher-cost individuals would have retained coverage, increasing average costs and premiums. While the legal challenge to subsidies has been decided, the Academy urges policymakers to assess any proposals that may be offered to modify or replace the ACA against these important market reform principles.

CHIP renewal, court ruling affect coverage for nearly 2M children

An Urban Institute report predicts that 1.9 million children would lose coverage if Congress decides not to reauthorize the Children’s Health Insurance Program and if the Supreme Court rules against Affordable Care Act subsidies. “The combination of both policies would mean a lot of progress we’ve made over the last 20 years would be wiped out,” Urban Institute senior fellow Lisa Dubay said. The Hill (3/18), Modern Healthcare (tiered subscription model) (3/18)

Key Senate Republicans offer bridge if ACA tax credits fall

Consumers who enrolled in health insurance through would not immediately lose tax credits and subsidies if the Supreme Court rules against the Obama administration, Republican Sens. Orrin Hatch of Utah, John Barrasso of Wyoming and Lamar Alexander of Tennessee wrote in the Washington Post. “We would provide financial assistance to help Americans keep the coverage they picked for a transitional period,” the senators wrote. Bloomberg (3/1), The Washington Post (tiered subscription model) (3/1)

Alito hints at compromise ACA ruling

Supreme Court Associate Justice Samuel Alito on Wednesday hinted during arguments on Affordable Care Act tax credits that a ruling against the Obama administration might not immediately invalidate credits. Instead, the court might stay its own ruling to allow a transition phase during which consumers who used to enroll in a 2015 health insurance plan could keep their tax credits for the year. Bloomberg (3/4), Kaiser Health News (3/4)

ACA enrollment raises the stakes in Supreme Court case

About 8.6 million people in 37 states used to enroll in or renew a 2015 health insurance plan, and the majority of them would lose their premium subsidies if the Supreme Court rules that tax credits are available only through state-run exchanges. More than 85% of users qualified for a tax credit, HHS Secretary Sylvia Mathews Burwell said. The New York Times (tiered subscription model) (2/19)

Study: Ruling to overturn ACA tax credits would disrupt the market

If the Supreme Court rules in favor of the plaintiffs in a case challenging the Affordable Care Act’s tax credits provision, 9.6 million people could lose access to health insurance, and the resulting instability would shake the individual health insurance market in states using the federal exchange, according to a Rand Corp. analysis. Bloomberg (1/8), The Hill (1/8)

Full court to take up ACA subsidy case

The full U.S. Court of Appeals for the District of Columbia Circuit will take another look at a ruling by a three-judge panel that said subsidies were not allowed for health coverage purchased via the federal Affordable Care Act exchange. The decision to consider the case vacates the earlier ruling. The court leans Democratic, and if it rules in favor of the government, Supreme Court action is unlikely. The Hill (9/4)

Last Updated 12/01/2021

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