Federal Judge Rules Individual Mandate Unconstitutional

admin — Tue, 01 Feb 2011 22:58:38 +0000

On January 31, United States District Court Judge Roger Vinson ruled that the individual mandate in the Patient Protection and Affordable Care Act is unconstitutional and that the entire Health Care law should be voided. The individual mandate provision in the Act requires Americans to purchase health insurance or face being fined. According to the current law, beginning in 2014, the government will enforce a yearly financial penalty of the greater of $695 per person (up to a maximum of $2,085 per family per year) or 2.5% of household income. The state of Florida, backed by 25 other states, brought suit because they indicated that Congress did not have the authority to force individuals participate in commerce. Additionally, Judge Vinson ruled that because the individual mandate is not severable from the law, the entire Health Care Reform must be annulled.

“The individual mandate exceeds Congress’ commerce power, as it is understood, defined, and applied in the existing Supreme Court case law.”
-U.S. District Judge Robert Vinson

What does this mean for you? As of now, no laws have changed. The United States Department of Justice plans to appeal this decision, and it may go all the way to the U.S. Supreme Court. If the Supreme Court rules in favor of Judge Vinson’s decision, there will certainly be changes to the Health Care Reform that may affect families and employers. If you have any questions about the potential implications, do not hesitate to contact us. We will keep you updated as more developments occur.

The 26 states involved in the lawsuit are Alabama, Alaska, Arizona, Colorado, Florida, Georgia, Indiana, Idaho, Iowa, Kansas, Maine, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin, and Wyoming.

Health Care Reform: What Happens When

admin — Thu, 27 Jan 2011 20:45:42 +0000

The passing of the Patient Protection and Affordable Care Act (PPACA) in March 2010 instituted numerous changes to Health Care system in the United States. Some provisions took place immediately, while others do not kick in for a few years (the last change goes into effect in 2018). This act institutes widespread change to the previous law, affecting not only individuals and families, but impacting employers and their businesses as well.

Pay close attention to changes occurring in 2011 as some provisions were effective January 1st. One of these laws states that over-the-counter drugs can no longer be reimbursed through a Health Reimbursement Account (HRA) or a Health Flexible Spending Account (FSA), nor can they be reimbursed tax-free through a Health Savings Account (HSA) or an Archer Medical Savings Account (MSA). Another change that took place at the turn of the new year regarded Simple Cafeteria Plans for small business that include a safe harbor from nondiscrimination requirements. There are other changes highlighted in this guide that begin at various times throughout 2011 and the following years. Please note that the change in W-2 reporting that was originally planned to take effect for the 2011 tax year has been pushed back to 2012.

BREAKING NEWS: On March 8, the Obama administration appealed Judge Vinson’s ruling that the individual mandate is unconstitutional. This fight is likely to go all the way to the Supreme Court.

Looking beyond 2011, there will be numerous rounds of changes, including an individual mandate in 2014 that will require all United States citizens to have health insurance coverage or face being fined. There will also be an elimination of capping annual limits on health coverage, as well as an increase in the Medicare tax for individuals who earn over $200,000 per year and families who make an excess of $250,000. For these people, there will be a tax increase of 0.9 percent on earnings over those amounts, as well as a 3.8 percent tax assessment on their investment income.

It is also important to look back at 2010 and make a note of the changes that took place, as there may be some provisions that may not yet be noticeable. Most notably, dependents on a parent’s health plan have coverage under that plan until that dependent reaches the age of 26. Additionally, insurers may no longer deny coverage to a child due to that individual’s preexisting condition. There are also many plans in place before the passing of the PPACA that are subject to the Grandfather Rules and are exempt from several of the new insurance requirements of the act.

While there are aspects to the Health Care Reform that may be confusing to some, this timeline should serve as a guide to help you understand what changes take place when and which amendments will affect you immediately, in the future, or not at all. If you have any questions about the changes taking place over the next few years and how the Patient Protection and Affordable Care Act may have an effect on you, do not hesitate to contact us.

Click on the file to the left to view a timeline of the Health Care Reform.

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Federal Judge Rules Individual Mandate Unconstitutional

Health Care Reform: What Happens When