New York Labor and Employment Law Report
Courts Split on Constitutionality of "Individual Mandate" in Health Care Reform Legislation
December 21, 2010
To date, three federal courts have ruled on the constitutionality of the section of the Patient Protection and Affordable Care Act (“PPACA”), which, beginning in 2014, imposes a monetary penalty on individuals who are not covered by adequate health insurance. The coverage requirement is commonly known as the individual mandate.
On December 13, 2010, Judge Henry E. Hudson of the United States District Court for the Eastern District of Virginia ruled that the individual mandate is unconstitutional and not enforceable. This decision conflicts with two prior Federal court decisions, one from the Eastern District of Michigan and one from the Western District of Virginia. In those cases, the courts held that the individual mandate is constitutional.
Most recently, on December 16, 2010, the constitutionality of the individual mandate was argued before Judge Robert Vinson in the Northern District of Florida. The Northern District of Florida case, which has not yet been decided, was brought by twenty states and challenges the PPACA on several grounds, including the constitutionality of the individual mandate. The constitutionality of the individual mandate is likely to be determined eventually by the United States Supreme Court.
Despite the current uncertainty created by the conflicting court decisions, senior White House officials have said that the Obama Administration will continue to work vigorously to implement the PPACA. With respect to those PPACA provisions that become effective before 2014, employers and group health plan sponsors should do the same thing. Even though the individual mandate is not scheduled to become effective until 2014 (and may not become effective at all), employers and group health plan sponsors should continue to implement applicable PPACA requirements that took effect in 2010 or that will take effect beginning in 2011.
