On Monday, January 31, a Federal district judge in Florida ruled the Patient Protection and Affordable Care Act (PPACA) unconstitutional. Like a similar earlier ruling from a judge in Virginia, the Florida court's principal concern with the law involves a provision of the PPACA which requires individuals to pay a penalty if they do not carry some form of health insurance. This "individual mandate" provision goes into effect beginning in 2014.

The ruling adds to a growing list of Federal court cases related to the PPACA. Two other Federal judges have already issued rulings in favor of its constitutionality, and additional suits are pending. Federal appeals courts in both the 4th and 6th circuits are already planning to hear appeals, but ultimately the issues will be decided by the Supreme Court. The biggest impact of the current court decisions is what they add to the already vigorous debate in Congress regarding the future of the legislation.

 

What do Employers Need to Know?

The rulings have no immediate effect on employer sponsored benefit plans. Both judges who have ruled the law unconstitutional have allowed all aspects of the PPACA to stay in effect pending the outcome of the appeals process. Also, in the Virginia case, only the individual mandate provision was ruled unconstitutional. If upheld, that case would not directly impact other provisions of the PPACA, such as adult child eligibility to age 26.

At this point, employers should proceed with current benefit plan changes that are a result of the PPACA, and continue to monitor developments in the courts. It is expected that the Supreme Court will address many of the outstanding issues prior to their 2014 effective date.

While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting or other professional advice or services. Readers should always seek professional advice before entering into any commitments.

 

As more details of the Patient Protection and Affordable Care Act (PPACA) emerge, The McCart Group will update you on selected provisions that affect employers and employer-sponsored group health plans.