The United States Supreme Court will hear oral arguments regarding the constitutionality of the Patient Protection and Affordable Care Act (PPACA) from March 26 through 28of 2012, according to the New York Times and several other media services. The amount of time set aside for the hearings, over three days, signals the gravity and importance of the issue, and is without precedent in modern times.
The U.S. Supreme Court docket outlines the three days of arguments to help resolve the legal issues associated with PPACA.
On March 26, attorneys on behalf of the 26 states that have brought legal action will argue whether the Anti-Injunction Act applies to PPACA. The Anti-Injunction Act prohibits lawsuits on taxation bills from being heard until the tax is brought into effect.
It is still questionable whether the penalty for an individual failing to purchase health insurance under the individual mandate is, in fact, a tax. One district court found this to be the case, finding that the penalty is codified in the IRS rules. If the Court rules that the Anti-Injunction Act applies, it will terminate any legal action against the PPACA until the PPACA tax penalty becomes effective on January 1, 2014. This is especially interesting in that none of the parties asked the Court to consider that issue. All parties involved asked the Court to decide on issues outside of the Anti-Injunction Act. The Court has appointed outside counsel to argue for the applicability of the Anti-Injunction Act.
The hearing scheduled for March 27 will focus on the extent that the Commerce Clause of the U.S. Constitution delegates to the federal government the authority to regulate interstate commerce, and specifically whether the federal government can force someone who does not want to engage in interstate commerce to buy something. The specific issue asks if the refusal to participate in interstate commerce by an individual failing to purchase health insurance, generally known as the individual mandate, constitutes engaging in interstate commerce and is thus subject to federal regulation. There are legal precedents to which both sides can appeal. Some cases have found an unlimited authority on the part of the federal government. Other cases have stated that the delegated authority under the Commerce Clause is not without limits.
The final arguments on March 28 will address the issue of the missing severability clause that would have protected the balance of the PPACA in the event that the Supreme Court declares another part of the PPACA to be invalid. Severability clauses are standard boilerplate for legislation. A severability clause was included in all but the final draft of the PPACA that passed the U.S. Senate. The U.S. House of Representatives considered the Senate version for action, and passed the Senate version without a severability clause. The Court will also hear arguments on the last day on the constitutionality of the federal government forcing states to participate in PPACA or be subject to punishment by withholding Medicaid dollars.
The Court’s decision should be released sometime mid-summer, likely in the middle of the 2012 election cycle. A decision pro or con will have immense impact on the U.S. Presidential election.
For additional information about the U.S. Supreme Court and PPACA, click here to read about several previous blogs on the subject.
Please visit www.benefitmall.com to view past Legislative Alerts. Or, you may visit www.HealthcareExchange.com for blog posts, polls, surveys and numerous resources.
The views expressed in this post do not necessarily reflect the official policy, position, or opinions of BenefitMall. This update is provided for informational purposes. Please consult with a licensed accountant or attorney regarding any legal and tax matters discussed herein.
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