Benefits, HR News & Trends

Supreme Court Upholds Health Care Law, Mandate to Buy Health Insurance

Health care reform has been a key initiative of President Obama's administration.

See updates below, including statements from SHRM and WorldatWork.

Let the finger pointing begin: a divided U.S. Supreme Court upheld the constitutionality of President Obama’s health care law Thursday by a 5-4 vote, essentially saying that the government has the right to levy a tax penalty on people who don’t have health insurance.

According to The Wall Street Journal’s Election 2012 blog:

It upheld the mandate as a tax, in an opinion by Chief Justice John Roberts. The justices also found fault with part of the health-care law’s expansion of Medicaid, a joint federal-state insurance program for the poor. The justices made some changes to the Medicaid portion of the law.

The court said Congress was acting within its powers under the Constitution when it required most Americans to carry health insurance or pay a penalty — the provision at the center of the two-year legal battle.

The ruling on the mandate question was 5-4, with Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito in dissent.

Chief Justice Roberts wrote that the penalty’s “practical characteristics pass muster as a tax under our narrowest interpretations of the taxing power.” He said a person who does not wish to carry health insurance is left with a “lawful choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice.”

Chief justice sides with liberal justices

Somewhat surprisingly, Chief Justice Roberts, who wrote the majority opinion, sided with the court’s four liberal justices in upholding the health care law. Politico focused on the heart of his ruling, which said:

Simply put, Congress may tax and spend,” Roberts wrote in the majority opinion. “This grant gives the federal government considerable influence even in areas where it cannot directly regulate.

The federal government may enact a tax on an activity that it cannot authorize, forbid or otherwise control,” Roberts wrote.”

The split 5-4 Supreme Court decision seems to reflect the national mood toward the health care law, with no clear (or strong) majority either for it or against it.

Informal poll shows national split

For example, Manpower’s Chief legal Officer Mark Toth (we feature his blog posts frequently here at TLNT) did an informal survey on his Employment Blawg this week and asked what his readers thought would happen with the health care law in the Supreme Court. Here’s how the 174 people who voted broke down:

  • Uphold it 100 percent (19 voted for this);
  • Strike only the individual mandate (18 percent);
  • Strike several pieces but uphold it (45 percent);
  • Reject it 100 percent (14 percent);
  • None of the above (4 percent).

Toth added: “The overwhelming majority of you (82 percent) feel that the law will stay afloat in some fashion. Finishing in first place was “Strike several pieces but uphold it,” with nearly half the votes. Interestingly, only 1 in 5 of you believe that the law will stay completely intact. Only 1 in 8 think the law will get dumped in its entirety.

We’ll have more analysis of what this decision means for businesses, their employees, and HR professionals (who have to manage it), throughout the day here on TLNT. For more immediate insight, you may want to take a look at this article from the well-respected Scotusblog on A Readers Guide to the Health Care Ruling. 

SHRM, WorldatWork weigh in

UPDATE: SHRM, the Society for Human Resource Management, has weighed in with their statement on the Supreme Court ruling on the health care bill. As you might expect, it’s broad, general, and isn’t very specific. Here it is:

Human resource professionals have been at the forefront of implementing the requirements of health care reform at workplaces across the country. Today’s court decision upholding the Patient Protection and Affordable Care Act leaves no doubt that insurers and employers will move ahead to fully implement the law. The Society for Human Resource Management will remain supportive of HR professionals as they continue implementing requirements of the act.

While SHRM is still analyzing the court’s ruling, the ambiguity over the constitutionality of the law largely has been settled for the immediate future. SHRM will continue to help its members understand the law and the timeline for implementing its requirements. SHRM’s online Health Care Reform Resource Page, which provides tools and resources, will be updated for HR professionals as the full impact of the decision becomes clear.

Health care coverage is a critical workplace benefit to millions of employees and an important tool in recruiting and retaining a talented workforce for employers.

SHRM supports comprehensive reform that lowers health care costs, improves access to high-quality and affordable coverage, and strengthens the employer-based health care system. SHRM will continue to work with the Obama administration, Congress, federal agencies and other key stakeholders to continue to address our health care reform objectives.”

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UPDATE 2: Kaiser Health News, in its coverage of the Supreme Court’s health care ruling, noted that the High Court’s decision on Medicaid (part of the health care law they voted against) might hurt the ability for true “universal” health care to be put in place. They wrote:

While the decision bolsters the Obama administration’s signature legislation, it complicates efforts to create nearly universal health coverage if states opt out of the Medicaid expansion. Many Republican governors had hoped the court would strike the Medicaid expansion.

The decision leaves intact the remainder of the 2,700 page law, which requires insurers to accept all customers regardless of their health status, provides tax credits to those who need help to buy coverage, fines some employers who don’t offer insurance and provides billions to expand Medicaid to include many people not currently covered in many states. Those provisions go into effect in 2014 ….

State politics, meanwhile, will come into play on the ruling on the Medicaid expansion. The ruling gives states the option not to expand eligibility without losing funding for their existing program. They would, however, lose billions in additional federal funding that would have covered newly eligible residents up to 133 percent of the federal poverty level, or about $30,000 for a family of four. Today, about 60 million people are enrolled in the program.

Sara Rosenbaum, health policy professor at George Washington University, said she expects “the overwhelming number of states” to adopt the Medicaid expansion.

“The pressure to participate will be enormous from health care providers and communities,” she said. “The majority of states will not want to have its poorest residents without coverage.”

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UPDATE 3:  Cara Woodson Welch, the Vice President of Public Policy and Public Affairs at WorldatWork, a global human resources association, also had a statement in reaction to the Supreme Court’s decision to largely uphold the Patient Protection and Affordable Care Act (PPACA):

Today’s decision gives employers and benefit professionals some clarity. Now that the constitutional debate over the health-care law has been resolved, employers should continue to focus their attention on ensuring that their health-care plans are in compliance with the Patient Protection and Affordable Care Act. While we expect political debate to continue over health-care reform, employers are advised to keep moving forward with implementing PPACA and its governing regulations.

As agencies continue with the rulemaking process for enforcement of PPACA, regulators must keep in mind the importance of employer-sponsored health plans. The ideal health-care plan is unique to each organization and flexibility in plan designs is necessary for employers to create the best plan to serve as an effective and integral piece of an employee’s benefit package.

Agencies should continue to seek feedback from employers and HR professionals before finalizing any new regulations governing employer-sponsored health-care plans. As new regulations are finalized, employers must be given adequate time to make the necessary changes to their benefit plans.

Finally as new provisions of PPACA are enforced, WorldatWork strongly advocates that employers should not be burdened with penalties if they can demonstrate that they are working diligently and in good faith to comply with law.”

John Hollon is Vice President for Editorial of TLNT.com, and the former Editor of Workforce Management magazine and workforce.com. An award-winning journalist, John has written extensively about HR, talent management, leadership, and smart business practices. Contact him at john@tlnt.com, and follow him on Twitter at http://twitter.com/johnhollon.
  • Joy

    Wow SHRM way to fill up character space without saying one darn thing.  

    • Jacque Vilet

      Well Joy —- What can you expect from them???

      Otherwise —- I don’t know how it happened and would have LOVED to be a “fly on the wall” during their discussions.

      But who cares —— YAY!!!!!!