08/20/2012 11:49:00 AM EST
The Patient Protection and Affordable Care Act and How It Impacts Employers
by Elise D. Klein & Joseph K. Hegedus
In National Federation of
Independent Business v. Sebelius, No. 11-393 (U.S. June 28, 2012), the Supreme
Court of the United States upheld the constitutionality of the Act as a whole,
excepting only one provision that deals with the federal government's grant of
Medicaid funds to states.
Case links below are accessible by lexis.com subscribers
The Court's opinion was one of
the most anticipated in about half a century. Rather than the usual hour per
side, the Court heard argument in the cases challenging the constitutionality
of the Act for 5.5 hours over three days, one of the longest arguments in
modern Court history. To provide comparisons, the parties were allotted 1.5
hours in Bush v. Gore, 531 U.S. 98 (2000). In United
States v. Nixon, 418 U.S. 683 (1974), a case in which a sitting
President was ordered to release the Watergate tapes, 3.0 hours were spent
Thus, if the time the Supreme Court allots to oral argument is an indication of
how important a case is -- and it is -- then the Act surely piqued the interest
of the justices, the litigants, and the nation.
Although historically significant, the opinion did little to change the
employer-provided health insurance system that existed in the United States
prior to the Court's ruling, other than upholding the Act's constitutionality,
thereby leaving intact its provisions that apply to employers.
The Court resolved constitutional challenges to two provisions of the Act:
First, a surprising 5-to-4 majority of the Court, which included Chief Justice
John Roberts, upheld the individual mandate, which requires individuals to
purchase "minimum essential" health insurance coverage or pay a tax
penalty. Second, the Court struck one aspect of the Medicaid expansion
provision. Under that provision, the federal government would have withheld all
Medicaid funds from any state which elected not to expand its Medicaid roles to
cover all those with incomes less than 133% of the poverty level. The Court,
however, left many portions of the Medicaid expansion provisions in effect that
deny federal aid to those states that elect not to expand their Medicaid roles.
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