Landmark Decision by the Supreme Court Pushes the Burden of Reformulating the Nation's Health Care System Back to Congress and the Administration

June 29, 2012

This week’s decision by the U.S. Supreme Court in National Federation of Independent Business v. Sebelius upholding key provisions of PPACA answered legal questions, but for large employers practical issues and uncertainties remain.  In surprisingly strong language, Chief Justice John Roberts said in upholding the law that the members of the Supreme Court "possess neither the expertise nor the prerogative to make policy judgments. Those decisions are entrusted to our Nation’s elected leaders, who can be thrown out of office if the people disagree with them. It is not our job to protect the people from the consequences of their political choices.”  Of immediate concern to large employers are the deadlines and obligations imposed on companies that are tied to the establishment of health care exchanges.  For example, beginning October 1, 2013, just 15 months from now, the health care exchanges with all their attendant IT systems are required to begin enrolling eligible Americans.  Under PPACA, each state is encouraged to set up its own exchange, but if a state is unwilling or unable to do so, an exchange run by the federal government must step in with one. Thus far, only 14 states and the District of Columbia have even begun in earnest the process of building exchanges.  Therefore, if the exchange system is to become operable 15 months from now, the Department of Health and Human Services may have to undertake the herculean task of creating most of the remaining exchanges, but it will need Congress to provide the necessary funding.  At the same time, by March 1, 2013, employers must inform their employees about exchanges, explain how to enroll in one, and communicate to them that they may be eligible for tax subsidies by moving from the employer's plan to an exchange.  Further, employers are still waiting for regulatory guidance on central elements of the law, such as the “employer responsibility” provisions.  Congress could delay the effective dates of these various requirements but, at least in the near term, the Republican House appears intent upon voting to repeal the law altogether.  Thus, any necessary legislative fixes or funding patches, or outright repeal of the law, appear unlikely until after the November elections.