US Supreme Court to Rule on Health Care Reform Law

“Minutes after President Obama signed landmark Health Reform legislation on March 23, 2010, the first suit challenging the law was filed in U.S. district court in Florida. That case, after working its way through the district court and the United States Court of Appeals for the Eleventh Circuit, will now be heard by the U.S. Supreme Court, the Court announced today.” (Supreme Court Will Hear Challenge to Health Reform Law by Jackson Walker) 

File under: we knew it was coming but are glad it finally did. Earlier this week, the Supreme Court of the United States announced that it would review the constitutionality of the 2010 Patient Protection and Affordable Care Act, setting aside an almost unprecedented 5 ½ hours for oral arguments in the case, which is scheduled to be heard in March 2012. We will continue to monitor and update this list as updates are published:

On What the Court Will Review…

“Five petitions were under consideration for certiorari in this round of the Court’s review: Thomas More Law Center v. Obama, NFIB v. Sebelius, HHS v. Florida (certiorari was sought by both sides), and Liberty University v. Geithner. The Court’s decision to grant certiorari in NFIB v. Sebelius and by both the plaintiffs and the government in HHS v. Florida raises four issues before the Court:

  • First, the Court will consider the issue of severability of the individual mandate from the other provisions of the ACA (this was the only issue raised in NFIB v. Sebelius and the third question in Florida v. HHS). 
  • Second, the Court will consider the constitutionality of the individual mandate (question one in HHS v. Florida). specifically, the Court will decide whether or not the Commerce Clause of Article I of the Constitution grants Congress the powers to enact the minimum coverage requirements of the ACA.
  • Third, the Court will consider whether the suit brought by the respondents (the states in Florida v. HHS) challenging the individual mandate is barred by the Anti-Injunction Act, 26 U.S.C. 7421(a). Specifically, the Court will consider whether the insurance -mandate penalties amount to a type of tax that can only be challenged after it is collected, rather than before. If the answer is yes, then courts would not have legal subject matter jurisdiction to consider such challenges until individuals start paying penalties after the mandate goes into effect in 2014.
  • Fourth and finally, the Court granted certiorari on the Constitutionality of the expansion of the Medicaid program to individuals earning up to 133% of the Federal Poverty Level. Specifically, the Court will consider whether the spending conditions that the ACA imposes on the states in funding additional Medicaid beneficiaries are effectively “coercive,” such that they amount to an impermissible commandeering of state dollars by the federal government under the Constitution.”

(From U.S. Supreme Court to Decide Constitutionality of Affordable Care Act by Foley Hoag LLP) 

On the History of the Lawsuits…

“The Eleventh Circuit is the only circuit so far to invalidate the law. The Fourth Circuit dismissed two cases on procedural grounds, while the Sixth Circuit and the District of Columbia Circuit issued rulings upholding the constitutionality of the law under the Commerce Clause. Legal observers speculated that the Court would choose the Eleventh Circuit case, as it most squarely presents the issues of the constitutionality of the law under the Commerce Clause, the Necessary and Proper Clause, and the Taxing Power clause. The Court also agreed to hear the procedural issue of whether the Anti-Injunction Act prevents the federal court from having jurisdiction to hear the case…

The Eleventh Circuit reversed the district court ruling on the constitutionality of the Medicaid expansion provisions, and also ruled the individual mandate was severable from the rest of the law. It agreed with the lower court that the law violated the Commerce Clause, however, and that it was not resurrected by either the Necessary and Proper Clause, or the Constitution’s Taxing Power. The Court thus struck down the individual mandate provision from the rest of the law. Both the United States and the plaintiffs appealed.” (From Supreme Court Will Hear Challenge to Health Reform Law by Jackson Walker) 

On the “Individual Mandate”…

“The question of the individual mandate’s constitutionality, as presented by in multiple suits, turns on the interpretation of congressional authority to regulate interstate commerce as granted to it under Article I of the U.S. Constitution, known as the Commerce Clause. In approaching this analysis, at least one circuit court of appeals has accepted the argument that the Commerce Clause only applies to the regulation of individuals engaged in a commercial activity, refuting the Department of Justice’s (DOJ) assertion that the presence of an activity is not required for Congress to assert its Commerce Clause power.

Having determined that the presence of an activity is an integral part of the Commerce Clause, the question of the individual mandate’s constitutionality is framed on whether or not the failure to purchase health insurance constitutes an activity. According to the plaintiffs, the failure to purchase insurance is ‘inactivity’, and Congress therefore exceeded its Commerce Clause authority in embedding this requirement in the ACA, making the individual mandate unconstitutional.” (From Constitutionality of the Health Mandate and its Consequences by John Sarno) 

On What This Means for Employers…

“The Court has not set a date for oral argument; however, it likely will be sometime in March 2012. The Court has allocated over five hours for oral arguments instead of the usual one hour, illustrating the importance of the case. At this point, it is impossible to predict how the Court will rule; thus, it is important for employers to continue to comply with the PPACA and take steps to come into compliance with the provisions that have not yet taken effect.” (From Supreme Court Will Determine Validity of Health Care Reform Law by Ford & Harrison LLP) 


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