Courtesy of Knowledge@Wharton

America's health care reform may be out of the emergency room, but its prognosis remains sketchy. Passage of the historic 2,400-page legislation that President Barack Obama signed into law on March 23 by no means ended the health care debate, say Wharton experts. It just splintered one massive question mark into a lot of new big ones.

"The fat lady hasn't even come on stage yet," says Wharton professor of legal studies and health care management Arnold. J. Rosoff. "The current legislation is going to be in play for a good long time."

Rosoff notes that the new law is "an important step in the right direction" and believes it will open up business opportunities. But questions from employers across the country have already arisen about how to implement the new rules and what they mean for business. From public sector to private, the focus now falls on a jumble of loose ends that need to be tied up. Many of the legislation's much touted cost-cutting measures could backfire, some say. And the ugly political wrangling, backstabbing and partisan bickering that marred the bill's passage have raised questions about Washington's ability to manage future crises. After all this, the ultimate fate of health care remains up in the air as opponents seek ways to challenge or undo the reform.

As it stands now, the reform is expected to insure 32 million more Americans by mandating that all U.S. citizens carry health insurance and providing government subsidies to help those who can't afford it. It requires states to set up market-based exchanges so individuals without insurance can find coverage, and bans insurance companies from denying coverage for pre-existing conditions, imposing lifetime caps, or rescinding existing coverage after a person falls ill. By 2014, it also requires employers with more than 50 employees to offer affordable health insurance or pay annual fines of up to $750 per full-time worker.

Some business groups, such as the National Federation of Independent Businesses, have said the legislation places an unfair burden on small companies. "Forcing employers to offer health insurance, plain and simple, will cost America jobs and revenue, and inhibit small businesses from growing," the Washington, D.C.-based group said on its web site. "It's a bad idea any time, but is particularly destructive in the current economic environment."

The reform has a variety of implications for human resource departments, says Wharton management professor Peter Cappelli, who studies workforce issues. He notes that employers are trying to figure out which employees will be covered and what the ramifications of the new law will be. For example, the law says full-time employees must be covered, but what constitutes full-time?

In a recent column for Human Resource Executive Online, Cappelli writes that many provisions in the health care overhaul "spill over" into other human resource issues. "For example, an employer cannot pay for the costs of the mandated health care through reductions in wages, but how will that be assessed in practice?" Cappelli asks. "Will any reductions in pay become suspect as a result?"

The overhaul could also change the way companies recruit and retain employees. "Offering health care benefits will no longer be a big source of advantage in recruiting," Cappelli suggests. "While this may never have been a big deal for larger employers, it did matter for smaller ones. At the other extreme, some companies may try to structure themselves to remain small enough to avoid coverage under the Act. Others may decide that full-time employees are now too expensive. Will this contribute to greater use of part-time employees, temp workers or independent contractors?"

In addition to the recruiting question, offering health insurance may no longer provide employers with an advantage in retaining employees, Cappelli notes. Before the overhaul, some people with health issues stayed in unsatisfying jobs because they were afraid they might not be able to get health insurance if they switched employers -- a phenomenon known as "job lock." Theoretically, this shouldn't happen under the new plan. That means some employees who have been holding on to jobs they don't like might finally decide to jump ship. "How big will the uptick in turnover be as a result?" Cappelli asks. "Probably not huge, but possibly notable."