Health Care Reform: Constitutional or Not?

On January 31, 2011, Federal Judge Roger Vinson, in Florida, declared the entire Patient Protection and Affordable Care Act (aka Health Care Reform) void, holding that its core – the mandate that almost all Americans obtain health insurance – violates the Commerce Clause of the U.S. Constitution. The suit was brought by 26 states, including Colorado. In a 78-page decision, the court concluded that while Congress’s attempt to accomplish reform was laudable, Congress must operate within the bounds established by the U.S. Constitution.

This is the most significant ruling on this issue to date (four federal district courts have now weighed in). Experts agree, however, that the final ruling must come from the U.S. Supreme Court. A Supreme Court ruling may take another year or more, unless the Court chooses to hear the matter on an expedited basis.
MSEC attorney Peggy J. Hoyt-Hoch believes that employers must now seek alternatives to the existing health care model: “I have great hope for the creative potential of health care exchanges to squeeze inefficiencies out of the whole process of design, marketing, administration, underwriting, commission payments, and risk sharing, as employers have known them.”

In related developments, while the Senate rejected an amendment on February 2, 2011 that would have repealed the health care reform law, it approved an amendment to undo a provision that required employers to furnish 1099 statements to corporate vendors for services over $600. This is welcome news for most employers.