Posted by Mark Trank on July 16, 2012

Health Care Act Survives: So What's Next?

health.pngNow that the U.S. Supreme Court has resolved the constitutionality of the Patient Protection and Affordable Health Care Act (aka ObamaCare), question arise as to what potential legal challenges may lay ahead. First, let’s sort out the major components of the Court’s opinion:

Upheld the highly controversial “individual mandate” part of the law, which requires most Americans to obtain “minimum essential” health insurance coverage by 2014 or face a penalty; and

Upheld the law’s Medicaid expansion but held that the federal government could not penalize states that refuse to go along with the expansion requirements by withdrawing existing Medicaid funds.

The individual mandate was by far the most hotly disputed provision in the law, and despite the odds and popular media’s predictions that it would be struck down, the Court, led by Chief Justice John Roberts in a 5-4 vote, upheld the provision as within Congress’s power under the Taxing Clause to the Constitution.

Interesting for a number of reasons, not the least of which that this was the Obama Administration’s third, back-up argument in support of the law. The first was that the law could be enacted under the Commerce Clause, and the second was that it was authorized under the “Necessary and Proper” Clause.

Roberts wrote in his opinion that Congress did not call the penalty a “tax,” but the label does not determine whether the payment can be viewed as an exercise of Congress’ taxing power. Roberts cited several factors supporting the view that the payment is a tax, including the fact that the Internal Revenue Service will collect it. He also said that, for most Americans, the amount due will be far less than the price of insurance.

Congress’ use of the taxing clause to encourage buying something is not new, Roberts wrote. Tax incentives already promote, for example, home purchases and professional educations, he said.

“The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax,” he wrote. “Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.”

So, as the dust settles, what can businesses expect? The law has a number of key dates that companies need to know. By January 1, 2014, insurers will be prohibited from discriminating against or charging higher rates for any individuals based on pre-existing medical conditions. That is sure to be an area where potential litigation may arise. In addition, by this date, the law will impose a $2,000 per employee tax penalty on employers with more than 50 employees who do not offer health insurance to their full-time workers.

Much remains to be sorted out and understood, but businesses and individuals should carefully review the law with their legal counsel and monitor these and other key compliance dates.

Posted by Mark Trank on August 16, 2011

The Individual Mandate may not be dead, but it isn't looking so good

Now that a divided U.S. Court of Appeals for the 11th Circuit panel has ruled that the individual mandate aspect of President Obama’s health care overhaul law is unconstitutional, what’s going to happen next?

Calling it an “unprecedented exercise of congressional power,” the Atlanta federal appellate court (in a 300+ page opinion, including one dissent) sided with Florida and 25 other states in rejecting a plan that would require almost all Americans to have health insurance in 2014.

The 11th Circuit’s decision (2-1 against the law) is the latest in a series of federal court rulings on the much-debated health care plan, as the panel held that the mandate exceeds congressional power under the Commerce Clause (i.e., Article I, Section 8 of the U.S. Constitution). The majority said Congress cannot require Americans to buy expensive insurance “from the time they are born until the time they die.”

With more than a hint of sarcasm, the dissenting judge, Stanley Marcus, a former U.S. Attorney from Miami, dismissed the "impending doom" and "parade of horribles" predicted by opponents of the law, saying that upholding the law does not mean that the feds will "compel us to purchase and consume broccoli, buy General Motors vehicles and exercise three days a week."

The 11th Circuit ruling runs contrary to a recent decision from the 6th Circuit in Ohio, which concluded that the individual mandate is within legislators’ authority to regulate interstate commerce under the Commerce Clause. The majority in that case ruled that Congress had a “rational basis” for concluding the minimum coverage provision is essential to the law’s larger reforms.

It is a virtual guarantee that this dispute will ultimately be decided by the U.S. Supreme Court, which will have the final judicial say on whether it is constitutional for Congress to require Americans to purchase medical insurance.

However, more courts are likely to weigh in on this issue before the Supreme Court gets there, as there are more than 30 lawsuits that have been filed over the health care legislation.  Stay tuned…

Posted by Mark Trank on May 26, 2011

Employee Rights Legislation Reintroduced in Congress

I previously wrote about legislation recently introduced in Congress to expand the Family and Medical Leave Act to require employers to let employees off to attend school plays and visit relatives in nursing homes.  Since then there have been several other bills reintroduced that, if passed (unlikely) could dramatically alter the employment landscape for many businesses.

The proposed “Employment Non-Discrimination Act” (H.R.1397 & S.811) would prohibit workplace discrimination on the basis of sexual orientation or gender identity nationwide, and it was reintroduced in Congress in April by Representatives Barney Frank (D-MA) and Ileana Ros-Lehtinen (R-FL) in the House and Senators Jeff Merkley (D-OR) and Susan Collins (R-ME) in the Senate.  Don’t hold your breath on this one……

In another sign of optimism, Senator Tom Harkin chose April 12, 2011 – known as “Equal Pay Day” -- to reintroduce the “Fair Pay Act of 2011.” Harkin has offered this bill every Congress since 1996.  The bill would require employers to provide equal pay for jobs that are equivalent in skills, effort, responsibility and working conditions (I thought this was already required under the Equal Pay Act) and would also require companies to disclose their pay scales and rates for all job categories (a new requirement).

A related bill that was reintroduced on “Equal Pay Day” this year is the “Paycheck Fairness Act” which purports to close loopholes in the enforcement of the current equal pay laws, prohibit retaliation against workers for sharing salary information with co-workers, and strengthen penalties against employers for violations of equal pay laws.

Observers on Capitol Hill predict tough going for these bills, especially in the Republican-controlled House.  Stay tuned……

Posted by Mark Trank on April 26, 2011

Enhanced Family and Medical Leave Bill Afoot in Congress

father_sonl.jpg(Why I may get to leave work NOW for Johnny's play, and you can’t stop me, Boss!)

Legislation has been introduced in Congress this month that would greatly expand the federal Family and Medical Leave Act (FMLA).

H.R. 1440 -- the Family and Medical Leave Enhancement Act of 2011 -- was introduced on April 8, 2011 by Rep. Carolyn Maloney, a Democrat from the 14th District of New York (Manhattan and Queens).

If adopted, many more employers would face the necessity of permitting leave for employees to attend to personal family and medical matters, including things like school plays and related activities.

Now, most employers that I represent take a reasonable, common sense approach to allowing their employees to go to their kids’ school plays and such.  But mandating that employers do so as a matter of federal law? Sounds like overreaching, doesn’t it?

As most employers know, the FMLA is intended to allow employees to take unpaid leave (up to 12 weeks in most cases) for medical reasons, for the birth or adoption of a child, or for the care of a child, spouse, or parent who has a serious health condition. The so-called Family and Medical Leave Enhancement Act of 2011 (FMLEA) would amend the FMLA to allow employees to take off from work to participate in or attend their kid’s and grandkid’s school and extracurricular activities, and for other purposes.

Under the bill, employers would be required to allow an eligible employee to:

  1. participate in or attend an activity that is sponsored by a school or community organization and relates to a program of the school or organization that is attended by a son or daughter or a grandchild of the employee; or
  2. meet routine family medical care needs, including for medical and dental appointments of the employee or a son, daughter, spouse, or grandchild of the employee, or to attend to the care needs of elderly individuals who are related to the eligible employee, including visits to nursing homes and group homes.


One sign that the drafters of this bill have not completely taken leave of their senses is that the bill would limit FMLEA leave to no more than 4 hours during any 30-day period, and no more than 24 hours of leave during any 12-month period.

One other major change to existing law would be that the FMLEA would apply to all private employers with 25 or more employees (currently the FMLA applies to private employers with 50 or more employees).

From the employer's perspective, given the Republican-controlled House, the prospects of passage of H.R. 1440 are not favorable, to say the least.  Whew....