On Monday, a federal district judge in Richmond, Virginia struck down as unconstitutional the section of the Patient Protection and Affordable Care Act ("PPACA") that imposes a monetary penalty on those who do not purchase adequate health insurance coverage. Under the law, most Americans would be required to purchase health insurance by 2014 or face a $695 annual fine.
In a 42-page decision, Judge Henry Hudson found that the federal government does not have the authority to impose an "individual mandate" forcing Americans to purchase health insurance. Two other federal district courts in Michigan and Virginia have also addressed this issue and, unlike Judge Henry, have found the law to be constitutional. With these conflicting rulings and several cases still pending across the United States, supporters and critics of the health care bill alike predict the issue of constitutionality will ultimately be resolved by the Supreme Court.
Employers should note that these rulings do not impact any of the PPACA provisions imposing requirements or restrictions on employers and employer plans. Therefore, employers should continue planning for the implementation of the PPACA's requirements that will take effect for plan years beginning in 2011.