Minnesota Lawyer
Few pieces of legislation will have a more wide-ranging effect on the practice of law in 2013 and beyond than the Affordable Care Act.
After a two-year holding pattern that left lawyers unsure of whether the measure – which was signed into law in 2010 – would withstand a constitutional challenge, the U.S. Supreme Court upheld most of the law, striking down only a provision regarding mandatory state expansion of Medicaid.
The June 2012 decision in National Federation of Independent Business v. Sebelius,132 S. Ct. 2566, sent lawyers rushing to prepare. Now, as employment lawyers and their clients wait for the law to be fully implemented in 2014, one of the first decisions they are making is whether to provide health care coverage at all.
Under the law, employers can opt to pay a penalty in lieu of providing coverage for full-time employees, leaving workers to buy their own health insurance from state-based exchanges that offer coverage options.
According to Steven J. Friedman, chairman of the employee benefits practice at Littler Mendelson in New York, that decision will be based largely on companies’ balance sheets.
“Certain employers [may] take the position that they don’t care what others are doing – that they are going to continue to offer health care no matter what,” Friedman said. “Other employers may look at the bottom line and ask themselves what they have to do to remain competitive as employers in this job market. And they may [decide to] stop offering coverage, pay the penalty and save money.”
More challenges lay ahead as attorneys await crucial final guidance from federal agencies on how some provisions of the law will be interpreted and defined.
For example, in September the Internal Revenue Service and the Departments of Labor and Health and Human Services proposed temporary guidance on the definition of “full-time” employee under the shared responsibility provision of the law, a critical definition that will determine when employers may face certain penalties for failing to provide affordable minimal coverage to qualifying workers.
One major outcome of the ruling could stem not from what the Supreme Court decided but from how it reached its decision. Because the justices rejected the government’s argument that the Commerce Clause gave Congress the power to enact the law, instead finding that Congress’ authority came from its taxing and spending powers, trial attorneys from groups such as the American Association for Justice say they have new ammunition to fight tort reform efforts.
Legislation such as the House-passed H.R. 5 (which would cap non-economic damages in medical and other health-related negligence cases at $250,000, limit attorney contingency fees, cap punitive damages and allow courts to require periodic payments of damage awards) are based on lawmakers’ Commerce Clause authority. Opponents plan to use the health care ruling to challenge lawmakers’ ability to impose such a law.
“It’s an indirect way to use the Commerce Clause [to alter] patients’ legal rights under state law,” said Jennie Rasmussen, AAJ’s federal relations counsel. “If Congress cannot mandate health care coverage under Commerce Clause authority, I can’t see how they are going to justify a federal takeover of state tort law.”
