HR Management & Compliance

Supreme Court Upholds Healthcare Reform Law

U.S. Supreme Court BuildingBy Jessica Webb-Ayer

The wait is over: The U.S. Supreme Court has decided that the massive healthcare reform law (also known as the Affordable Care Act, or ACA) enacted in March 2010 is constitutional. So what happened, and what does this mean for employers?

Read the Supreme Court’s decision on Health Care Reform

The most publicized challenge to the ACA concerned the individual mandate, which starting in 2014 will require most individuals to obtain health insurance or pay a fine. The Court upheld this provision, asserting that the mandate is constitutional as a tax.

The Court also looked at three other ACA-related issues:

  • The Anti-Injunction Act. The justices determined that it wasn’t too soon to decide the case because of the Anti-Injunction Act, a federal law that requires a tax to be collected before it can be challenged in court.
  • Severability. The justices heard oral arguments centered on whether the individual mandate could be severed from the rest of the law if the Court found it unconstitutional. Since the Court upheld the mandate, it didn’t have to make a decision regarding severability.
  • Medicaid. Finally, the Court determined that the ACA’s expansion of Medicaid is lawful as long as the government doesn’t penalize states that decide not to participate in the new program by taking away their existing Medicaid funding.

The Court’s ruling in this case means employers need to continue their implementation of various ACA requirements. They also need to start preparing for 2014, when many of the employer-related provisions become effective (e.g., the employer “pay or play” provision). We will provide more in-depth analysis on the Court’s decision soon.

Keep up with developments on employer-provided benefits, including health care reform, with Benefits Complete Compliance.

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