Second Opinions | Published in June 2012

The Big Test

Supreme Court of the U.S. decision: A road map for plan sponsors

By PLANSPONSOR staff | June 2012
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Illustration by Christopher Silas Neal

The U.S. Supreme Court hearings on health care reform have garnered an extraordinary amount of press and opinions, some more accurate than others.

We have received a number of questions about the court’s possible decision—which may be handed down this month—and, in particular, what specific provisions are at stake under various decision scenarios. Here are a few:    

Which Affordable Care Act (ACA) provisions affecting group health plans are at issue?   

The only ACA requirement that the Supreme Court is deciding that directly affects group health plans is the individual mandate. Generally, the ACA requires individuals to all have minimum essential coverage beginning in 2014 or face a penalty, payable on their personal tax return in 2015 (for the 2014 tax year).     

What if the court deems the individual mandate a tax under the Anti-Injunction Act?   

One of the first questions for the court to decide is whether it is able to hear the case at all. If the court finds the penalty is actually a tax, as the Fourth Circuit Court of Appeals did, it may also find that, under the Anti-Injunction Act, it cannot decide the case until the tax actually applies, in 2015. In that case, all of the current and future ACA provisions that apply to group health plans will continue to apply. The issue then may be brought up again in or after 2015.   

What if the court decides the individual mandate is not a tax—and therefore may be considered—and that the individual mandate is constitutional?   

If the court decides it can take up the question of the individual mandate, next it must decide if the mandate is within Congress’ powers under the Commerce Clause and is, then, constitutional. If the court finds the individual mandate constitutional, all ACA provisions that apply to group health plans will continue to apply, unchanged.