The Supreme Court’s decision in National Federation of Independent Business v. Sibelius upholding the Patient Protection and Affordable Care Act (PPACA) leaves in place the market reforms and tax provisions that have become effective under health care reform over the last two years and gives a green light to the continued implementation of these measures. All health plan sponsors and administrators should continue to take action to comply with these requirements as they become effective. Employers whose plans fail the PPACA’s minimum standards of coverage or affordability should consider restructuring their benefits to avoid heavy penalties.
Majority Opinion Upholds Individual Mandate
The majority opinion, written by Chief Justice John Roberts, found that the requirement imposed by PPACA to maintain minimum essential health insurance coverage or make a “shared responsibility payment,” while outside Congress’ authority under the Commerce Clause, could be read in a manner that comports with Congress’ power to tax and spend. The Court also found that the authority given to the Secretary of Health and Human Services (HHS) to withhold all federal Medicaid funding from states that failed to expand Medicaid eligibility in accordance with PPACA exceeded Congress’ power under the Spending Clause, but could be severed from the rest of the statute so that only new Medicaid funds are conditioned on a state’s compliance.
Please see full alert below for more information.
Firefox recommends the PDF Plugin for Mac OS X for viewing PDF documents in your browser.
We can also show you Legal Updates using the Google Viewer; however, you will need to be logged into Google Docs to view them.
Please choose one of the above to proceed!
LOADING PDF: If there are any problems, click here to download the file.