Supreme Court to rule on health care reform

November 2011

The Supreme Court announced on November 14, 2011 that it will consider the constitutionality of health care reform during its current session.

This means the justices will hear arguments in March and likely issue a decision in late June. The court did not agree to hear arguments from all of the appellate courts or on the entire law, but only on these four specific elements:

• Whether the “individual mandate” is constitutional. This is the part of the law that would require all eligible Americans to purchase health insurance by 2014 or pay a penalty. The U.S. Court of Appeals for the 11th Circuit in Atlanta ruled in August that this mandate was beyond Congress’s authority to regulate commerce or “to lay and collect taxes.”
• Whether the law’s expansion of the Medicaid program is constitutional. The Atlanta appeals court ruled that expanding the eligibility and coverage thresholds that states must adopt to remain eligible to participate in Medicaid also exceeded the constitutional authority of Congress.
• Whether it is premature to decide the case. The U.S. Court of Appeals for the Fourth Circuit in Richmond, Va. ruled in September that it is premature to make a decision until 2015 when the first person is asked to pay the penalty. This is based on the Anti-Injunction Act, a federal law that bars lawsuits “for the purpose of restraining the assessment or collection of any tax.”
• How much of the law should be upheld if the individual mandate is ruled unconstitutional. Some of the mandates of health care reform are based on the government’s ability to raise funds using the individual mandate. If the Supreme Court were to find the individual mandate to be unconstitutional, it intends to make a decision on this as well.

What about the rest of the law?

Some provisions of health care reform are considered so “intertwined” with the individual mandate that it’s not certain how the Supreme Court will treat them. The prime examples are the mandate that forbids insurers from turning away applicants, and the mandate that bars insurers from using pre-existing conditions as a reason not to grant coverage.

Regardless of what happens to the legislation, we at Unum believe that many of the health care reform changes that already have been implemented will likely remain. These include coverage for children up to age 26 and the ban on insurers rescinding coverage except in cases involving explicit fraud.

In addition, at least for the short term, employers will likely continue to see medical premiums rising. This means an ongoing struggle for employers as they continue to determine which benefits they should offer, how much financial responsibility should be shouldered by their company and how much should be passed along to their employees.

Consultative help for the future

How do you build a benefits plan for the post-health care reform era? Your Unum representative is a great source for guidance in this new benefits landscape.

For a closer look at the health care reform mandates on the horizon, see the Unum report "The Pulse of Reform."