Supreme Court Decides Constitutionality of Health-Care Reform LawBy vote of 5-4, the U.S. Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act (ACA), the comprehensive health-care reform legislation that became law in March 2010. Specifically, the court determined that the law’s individual mandate, which requires all individuals to purchase health-care insurance or pay a penalty to the IRS, can be reasonably characterized as imposing a tax on those who do not have insurance, and falls within Congress’ constitutional taxing power. Because the mandate survived, the court did not need to decide what other parts of the law were constitutional, except for a provision denying funding to states that didn’t comply with broad new eligibility requirements for Medicaid. On that question, a majority held that taking away all of a state’s existing Medicaid funding because it choose not to participate in the ACA’s Medicaid expansion program is an unconstitutional use of the federal government’s spending power. Doing so runs counter to the country’s federalism principles and counts as “economic dragooning,” the court found, leaving states with no option but to acquiesce in the Medicaid expansion program. However, the majority of justices found that striking this one provision does not affect the other provisions of the ACA. Instead, the court determined that the remedy should be that Congress may not penalize states that choose not to participate in the Medicaid expansion by taking away their existing Medicaid funding.
With Court’s ruling, the ACA remains law, including those portions that affect employer-sponsored group health plans. Therefore, governmental plan sponsors must continue to comply with provisions of the act that are already in effect, such as the elimination of lifetime and annual dollar limits on essential health benefits and the extension of dependent child coverage to age 26. Governmental sponsors must also be ready to comply with the provisions of the act that are set to take effect in the next several years, including the upcoming requirement to distribute a summary of benefits and coverage to participants and the obligation to report the cost of an employee’s health coverage on the 2012 Forms W-2 issued in January 2013.
Click here for the Court’s opinion.
|
