Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Supreme Court begins review of health care reform law

Reprints

WASHINGTON—The likelihood that the Supreme Court will hand down a ruling on the constitutionality of a key provision of the landmark health care reform law in June appeared to increase Monday as the high court began the first of three days of oral arguments.

Several justices were openly skeptical of arguments made by a court-appointed outside attorney, who said that certain provisions in an 1867 law apply in this case. Those arguments include that legal challenges to a tax cannot be made until the tax actually has been paid.

Under the Patient Protection and Affordable Care Act's individual mandate, most U.S. residents must enroll in a qualified plan or pay a penalty tax. That tax would be due on federal tax returns due in April 2015.

Robert Long, an outside attorney appointed by the court to review whether the 1867 law—the Anti-Injunction Act—applied in this case, argued that law bars litigation before the tax has been assessed and paid.

When the Anti-injunction Act applies, “You have to pay the tax or the penalty first and then litigate to later to get it back with interest,” he said.

“Second, you have to exhaust administrative remedies; Even after you pay the tax, you can't immediately go court…The taxpayer is never allowed to rush into court before the tax—before the secretary sends a notice of deficiency to start the process,” Mr. Long argued.

Chief Justice John Roberts noted that the 1867 law didn't prevent the Supreme Court from ruling on the constitutionality of Social Security Act in the 1930s. “It's a case quite similar to this in which the constitutionality of the Social Security Act was at issue, and the government waived its right to insist upon the application of this act,” he said.

But Justice Ruth Bader Ginsburg said talk about tax penalties is irrelevant. What plaintiffs are seeking “is a determination that ‘must-buy' provision is unconstitutional and, if that's so, that's the end of the case; if it's not so, they are not resisting the penalty.”

Justice Sonia Sotomayor questioned if there would be a “parade of horribles” if the court heard the case now rather than waited until the penalties were paid.

Benefit attorneys attending the oral arguments said the questions and comments made by the justices suggest they won't let the 1867 law be a bar to ruling on the individual mandate.

“II don't see that the Anti-Injunction Act will get in their way of deciding this case, James Napoli, a senior counsel with Proskauer Rose L.L.P. in Washington, said in a statement.

On Tuesday, the court will hear arguments on whether the individual mandate is constitutional.

The court could uphold the mandate or it could strike it down. Yet another scenario is that the court could strike down the mandate and rule that, because the mandate is so intertwined with the broader law, the broader provisions would fall along with it.

If the court decides that the 1867 law does not block consideration of the constitutionality of the individual mandate, employers would not have to wait until 2015 to find out whether design changes they are making to their plans to comply with reform law provisions that go into effect before then would be necessary.

Transcripts/audio of Monday's oral arguments are available here.

For in-depth coverage of this topic and related issues, visit our Solution Arc on What Benefits Managers Need to Know About Health Care Reform.

Read Next

  • PPACA commissions rule sparks lobbying push by brokers

    WASHINGTON—The looming presidential election could have an impact on whether insurance producers will be able to get their commissions excluded from minimum medical loss ratio calculations under the Patient Protection and Affordable Care Act.