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Federal Health Care Reform Update

By July 17, 2011 February 19th, 2015 No Comments

Court challenges to the law: Federal district courts in Virginia and Florida ruled as unconstitutional the individual mandate contained in the health care reform. In their opinion, Congress did not have power under the Constitution to require citizens to purchase health insurance. Both of those cases have been appealed by the Obama administration to the U.S. Courts of Appeals covering those states. It’s anticipated the U.S. Supreme Court may ultimately decide this issue. In the meantime, the administration continues to implement and enforce the law.

Repeal of requirement for employers to provide “free-choice vouchers” to certain employees beginning in 2014: As part of the budget bill for the 2011 budget year, Congress repealed the requirement in the health care reform legislation requiring employers provide “free-choice vouchers” to certain employees beginning in 2014, when the health insurance exchanges are established. This would have required employers who paid any portion of the cost of health insurance for their employees to give “qualified employees” a voucher for the amount the employer would pay. The employee could then use that voucher to purchase health coverage from the exchange. For purposes of this requirement, a qualified employee was one whose required contribution for the employer-sponsored coverage was between 8 and 9.8 percent of the employee’s household income for the tax year. Employers were concerned this requirement would cause healthy employees to leave the employer plan to purchase less expensive coverage through the exchange.

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