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Supreme Court Rules on Affordable Care Act

In June, the U.S. Supreme Court upheld the constitutionality of two contentious provisions of the Affordable Care Act (ACA) in the case National Federation of Independent Business et al. v. Sibelius, Secretary of Health and Human Services, et al. The decision paves the way for continued implementation of the law. 

The ACA’s “individual mandate” requires most Americans to maintain “minimum essential” health insurance or pay a “shared responsibility payment” to the federal government. Opponents argued that compelling individuals to buy something unconstitutionally expanded Congress’s power to regulate commerce. However, the court determined that the “shared responsibility payment” is a tax and therefore within Congress’ authority.

The Act also requires state Medicaid programs to cover adults with incomes up to 133 percent of the federal poverty level by 2014; many states have more limited coverage. It allows the Secretary of Health and Human Services to penalize states that choose not to expand Medicaid by taking away Medicaid funding. The court’s majority found that withholding funds was incompatible with the Constitution’s Spending Clause, but nothing prohibited the federal government from offering states funds for Medicaid expansion. 

Most plan administrators, trustees and organizational representatives surveyed by the International Foundation of Employee Benefit Plans in late June reported they would “definitely” or “very likely” provide health coverage in 2014, when health insurance exchanges created by the ACA are scheduled to go into effect. 

As for their opinion of the decision, organizational representatives in the public sector, which stands to benefit the most, showed the most satisfaction with 59 percent satisfied. The multi-employer (49 percent) and single employer/corporation (33 percent) sectors had lesser degrees of satisfaction with the Supreme Court’s ruling. Interestingly, organizations in states that have already implemented health insurance exchanges are generally more satisfied with the Supreme Court’s decision (47 percent, versus 35 percent of respondents in states that haven’t implemented). They are also more prepared with current provisions (47 percent to 36 percent) and more likely to continue coverage in 2014 (56 percent to 42 percent).   

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