Judicial Review of the Health Care Reform Act

What Does It Mean for Employers?

Early last week, in Commonwealth of Virginia v. Sebelius, the federal district court in the Eastern District of Virginia ruled unconstitutional the provision of the Patient Protection and Affordable Care Act (the "Affordable Care Act") requiring individuals who do not otherwise have health insurance to obtain such coverage starting in 2014 (referred to as the "Individual Mandate").  This ruling is a departure from two previously issued federal opinions in which district courts in Virginia and Michigan ruled that the Individual Mandate is constitutional.

Given the different conclusions reached by different courts in different regions of the country, it is quite clear that the constitutionality of the Individual Mandate will be addressed by higher courts, and may reach the US Supreme Court before the 2014 effective date.

Importantly, despite the wide press coverage of this recent case, this ruling does not affect any of the requirements imposed by the Affordable Care Act on employers or employer plans.  As such, it is advisable for employers to proceed with their planning and implementation of the Affordable Care Act's provisions.   For example, plans should be prepared to implement the 2010/2011 changes regarding enrollees, reimbursements of over-the-counter drugs and nondiscrimination testing for insured plans.  Please refer to our prior Email Alerts regarding these changes.  CLICK HERE for Prior E-Alerts

Nukk-Freeman & Cerra, P.C. is available to discuss these cases and any aspect of the Affordable Care Act affecting employer plans.  Please feel free to contact Liza Hecht,  Christine Gottesman or the Nukk-Freeman & Cerra, P.C. attorney with whom you work to discuss the Act, or if you have any questions regarding your employee benefit plans.

Any tax advice included in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed on the taxpayer by any governmental taxing authority or agency.