Supreme Court Upholds Health Care Reform Law

The 2010 health care reform law is constitutional, the Supreme Court ruled Thursday.

In a 5-4 decision that contradicted much of the conventional wisdom, the high court said Congress had the authority to impose an individual mandate—the centerpiece of lawsuit challenging the health care reform law.

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

For employers, the decision means an end to the uncertainly they have faced since lawsuits challenging the legality of the Patient Protection and Affordable Care Act were filed by Republican state attorneys general shortly after President Barack Obama’s signature domestic initiative was signed into law in 2010.

“The Supreme Court’s ruling removes a major source of uncertainty surrounding this important national issue,” Sharon Cunninghis, leader of Mercer L.L.C.’s U.S health and benefits business in New York, said in advance of the ruling.

With the statute’s legality upheld, employers no longer will have to worry about issues that would have erupted had it been overturned. For example, employers with early retiree health care plans no longer have to worry about returning to the federal government claims reimbursement money from a $5 billion program authorized by the health care reform law.

Nor do employers have to worry that coverage they extended to employees’ adult children will be retroactively taxable.