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Executive Summary: Today, in a 5-4 decision, the U.S. Supreme Court upheld the individual mandate provision of the 2010 Patient Protection and Affordable Care Act (PPACA) as a valid tax, imposed within Congress' taxing power. See Nat'l Federation of Independent Businesses v. Sebelius (No. 11-393, June 28, 2012). The Court held that the individual mandate (which requires most Americans to purchase insurance or face an IRS tax) is not a penalty because the only consequence of not complying with the mandate is the requirement to pay the tax. Although the Court also held that Congress exceeded the power granted to it under the Commerce Clause when it enacted the individual mandate, the provision is nevertheless valid under Congress' taxing authority. The Court also held that the Anti-Injunction Act does not preclude the Court from ruling on the issue because the PPACA does not require that the penalty for failing to comply with the individual mandate be treated as a tax for the purposes of the Anti-Injunction Act. Chief Justice Roberts authored the majority opinion. Justices Kennedy, Scalia, Thomas and Alito dissented.
Impact of the Decision
The Court's decision means employers and plan sponsors need to be prepared to comply with the requirements of the PPACA that will take effect in 2012 and 2013. The more significant requirements include:
Ford & Harrison will be conducting a complementary webinar on June 29, 2012 from 1:00-2:00 pm EST discussing the impact of the Court's decision. If you have any questions regarding the decision or other employee benefits issues, please contact Tiffany Downs, email@example.com or any member of Ford & Harrison's Employee Benefits Practice Group.
 This decision is combined with Department of Health and Human Services et al. v. Florida et al. (No. 11-398) and Florida et al. v. Department of Health and Human Services et al., (No. 11-400).
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