Supreme Court hears challenge to federal health care reform law

The U.S. Supreme Court has concluded hearing arguments about the constitutionality of various parts of the federal health care reform law known as the Patient Protection and Affordable Care Act (PPACA). The Court’s decision on the fate of the law is expected by the end of June, when the Court’s current session ends. At issue in the case is PPACA’s “individual mandate” which requires nearly all individuals in the United States to maintain health insurance or pay a penalty, collected by the IRS.

The first issue argued before the Court was whether these legal challenges are barred by a federal law known as the Anti-Injunction Act. The Anti-Injunction Act requires that anyone challenging the imposition of a tax must first pay the tax, and then bring the legal challenge. Because the individual mandate and its penalty don’t take effect until 2014, if the Justices agree that the Anti-Injunction Act applies, this challenge couldn’t be heard until 2014, or later, when an individual actually was assessed the penalty for failing to maintain health insurance. According to most court observers, the Justices didn’t seem inclined to rule this way.

The next arguments concerned whether Congress had the power to impose the individual mandate, and if not, whether the mandate could be severed from the rest of the law—i.e. can the rest of the law stand without the mandate, or must the entire law be struck down? Also, if the individual mandate could be severed from the rest of the law, are there other provisions that are so dependent on the individual mandate that they too must be stricken from the law as a whole? While there is much speculation about how the Justices will rule, based on political affiliations and the content of their questions during oral argument, the outcome is really anybody’s guess. None of the PPACA provisions that most directly affect employers were at issue, however, so it will be only if the Court strikes the law down in its entirety that employers will be majorly impacted by the Court’s decision. Vigilant will keep members updated—stay tuned!