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After Election Day 2010, Democrats kept their majority in the Senate, but lost the House.  This new shift could have serious implications for President Obama’s Patient Protection and Affordable Care Act (PPACA).  Many Republicans say they will do everything possible to repeal the Act.  While they lack the needed majority, their new status allows them to make the bill mostly ineffective.

Republicans say they will not pass the appropriations bills needed to fully fund PPACA’s mandates.  As a result, administrative agencies will not have the funding they need to implement the Act’s provisions.  This includes funding for the IRS and Medicaid.  Republican leaders vowed to keep the Secretary of the Department of Health and Human Services so busy in meetings on Capitol Hill that she will not have time to work on PPACA’s policies and procedures.  In addition, the election led to a larger number of Republican governors across the country.  These Republican governors are less likely to implement the state insurance exchange programs. 

Even if the Republicans defunded the bill, there are still parts of PPACA that would remain.  Provisions such as prohibiting insurance companies from denying coverage based on a pre-existing condition, and requiring insurance companies to cover dependents until age twenty-six are two examples. 

While the political battle continues on Capitol Hill, the legislation is being challenged in the courts.  Twenty states are suing, claiming that PPACA is unconstitutional.  The case was consolidated and is being led by the Florida Attorney General.  Recently, the Florida District Judge denied the defendant’s motion to dismiss the case, allowing the case to proceed.  Part of PPACA requires individuals buy health insurance, or else pay a tax.  The Federal government refers to this as a “tax,” however the states argue this individual mandate imposes a penalty on individuals.  The states say Congress has the power to tax, but does not have the power to impose a penalty.  Both sides admit that there is little precedent on this issue, so the result is hard to predict.

Across the country, The Thomas Moore Law Center brought suit in Michigan claiming Congress does not have the right to regulate inactivity – the fact that people can choose not to have health insurance.  They argued Congress would violate the Commerce Clause by forcing a person to buy something from a private company or else pay a penalty.  The Federal judge for the Eastern District of Michigan found PPACA does not violate the Constitution’s Commerce Clause because Congress has the right to regulate economic decisions, not just economic activity.  The case is being appealed, and it is highly likely it will get to the Supreme Court within the next few months. 

Employers should keep a close eye on the various challenges to PPACA.  In the mean time, employers should talk to their attorneys and benefits administrators to prepare for the PPACA provisions that will come into effect over the next few years.  Brody and Associates regularly advises management on complying and remaining up to date with state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.965.0560.