Employee Benefits Compliance

US Supreme Court to Decide Constitutionality of Health Care Reform Law

The U.S. Supreme Court announced this morning (November 14, 2011) that it will review the controversial Health Care Reform law (The Patient Protection and Affordable Care Act or PPACA) that was enacted in March 2010. The Court will review three appeals from the 11th circuit case Florida v Health and Human Services. The Court scheduled more than five hours for oral argument. It usually allows only one hour for oral argument on a case. The issues on appeal are: the constitutionality of the individual mandate and the Medicaid expansion, and whether the Anti-Injunction Act prohibits the court from hearing challenges to the Health Care Reform law until 2015, once the law goes into effect and the IRS assesses a tax penalty on an individual for failure to purchase health insurance.

The court is likely to hear oral arguments in March and issue its decision in late June, just before the end of its 2011-2012 term and when the Presidential campaign is in full swing.

Additional detail on the four issues the Supreme Court will rule on (and the amount of time scheduled to hear oral argument):

1- Whether Congress overstepped its constitutional authority by enacting the individual mandate, which requires almost all US residents to have or purchase health insurance by 2014? (2 hours)

2- If the individual mandate is unconstitutional, whether it can be ‘severed’ from the rest of the Health Care Reform law, or if the Court must strike down the entire HCR law? (90 minutes)

3- Whether the HCR law’s expansion of the Medicaid program is constitutional. The HCR law expanded the Medicaid eligibility and coverage thresholds that states must adopt to receive continued federal funding not only of the Medicaid expansions but also of their existing Medicaid programs. The 11th Circuit decision upheld this expansion of Medicare. (one hour)

4 – Whether the Anti-Injunction Act (AIA) prohibits individuals from challenging the individual mandate until the first penalty tax is due in April 2015. The Supreme Court will also have to rule on whether the financial consequence of not having health insurance in 2014 is a “tax” or a “penalty” for purposes of the AIA. Several lower courts have considered this issue and come to opposite conclusions. (one hour)