Healthcare Upheld as a Tax – Employers get ready for 2014 now
After days of anticipation, the U.S. Supreme Court has upheld the validity of the Patient Protestation and Affordable Care Act, a.k.a., “Obamacare,” in its most important decision of this term. Despite the highly publicized hostility faced by the government’s attorneys when arguing before the Court’s 9 Justices, the 5-4 victory for the Obama team is sure to be the highlight of the President’s first term in office. Even more, the efforts of Congressional Democrats to make this Act a reality by overhauling our Nation’s health care system has been 100 years in the making.
The main argument before the Supreme Court was whether the Act’s mandate for private employers to carry health insurance for its employees, or pay a penalty, overstepped Congress’ Constitutional bounds. Speaking for the Court and siding with the Left, Chief Justice John Roberts said that the mandate could be construed as valid under Congress’ taxing power, “[b]ecause the Constitution permits such a tax, [therefore], it is not our role to prohibit it, or to pass upon its wisdom or fairness.” If not for the Court’s interpretation of this allotted taxing power, the Act would have been found unconstitutional under the Commerce Clause. The Court did limit, however, the expansion of Medicaid, by allowing it to proceed to the extent it did not threaten to withhold a states’ entire Medicaid allotment.
What does this mean for Employers?
You will probably have to buy more healthcare insurance. The ruling will affect some 32 uninsured million Americans. The Act will also essentially ban insurers from discrimination against those with expensive ailments (i.e. pre-existing conditions), allowing individuals to purchase, who previously did not qualify for health insurance. Although, the mandate for private employers to buy its employees’ healthcare insurance is 18 months away, taking effect in 2014, employers need to begin revamping their polices and business model now, as this mandate is but one of many new provisions of the 3,000+ page Bill.