Health Care Reform Update

By Kathleen Pohlid Founder & Managing Member, Pohlid, PLLC | October 07, 2012

On June 28, the Supreme Court settled the debate looming over the constitutionality of the Affordable Care Act, upholding the individual mandate scheduled to go into effect in 2014. Since enacted on March 23, 2010, the Act continues to phase-in significant reforms many of which impose requirements affecting employers. Although legislative attempts and political discussions continue to swirl for repeal of the Act, the time-line for full implementation of the Act continues. Businesses, including those in the hospitality industry, should be in compliance with those provisions that have gone into effect and ready for those remaining to be phased-in.

The Affordable Care Act has initiated comprehensive reforms of private and public health coverage, with many of those reforms directly affecting employers. The Act phases-in its reforms, several of which have already gone into effect. Employers in the hotel industry should be aware of those provisions and the obligations and decisions they may pose for their business. Below is a synopsis of several provisions that have already gone into effect, and those which will be implemented in the future.

Currently In Effect

a. Health Coverage for Adult Children Until Age 26. Insurers that offer dependent coverage are required to extend the availability of coverage to children of the insured until the child reaches the age of 26. This provision applies even if the child is married. However, adult children who are eligible to enroll in an employer-sponsored health plan (other than their parent's) are not covered under this provision until 2014.

b. Prohibition of exclusions for children with pre-existing conditions. Children under the age of 19 cannot be denied health coverage for pre-existing conditions.

c. Pre-Existing Condition Insurance Plans (PCIP). States have the option of running a PCIP to provide new coverage options to individuals who have been uninsured for at least six months due to a pre-existing condition. For states that opt not to run a PCIP, the Secretary will establish a plan in that state. PCIPs will continue until 2014, when discrimination against pre-existing conditions will be prohibited for all individuals.

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.