In a widely reported decision, a federal district judge in Florida has declared the health care reform law enacted last year to be unconstitutional.

The decision, issued January 31, 2011, holds that Congress exceeded its authority under the Commerce Clause of the U.S. Constitution by enacting a mandate that requires individuals to purchase a minimum level of health insurance or pay a prescribed amount under the Internal Revenue Code. The Court went on to find that this individual mandate could not be severed from the legislation as a whole, rendering the entire law unconstitutional.

As a result, the ruling would strike down reforms that have already taken effect, such as the requirement to cover children to age 26, as well as reforms scheduled to take effect in the future, such as the implementation of state health insurance exchanges.

The ruling conflicts with two prior federal district court decisions that found the individual mandate to be constitutional and a third decision that held the mandate to be unconstitutional but severed it from the rest of the legislation. With this growing conflict of opinions, it seems increasingly likely that the constitutional issues raised in these cases will ultimately need to be resolved by the U.S. Supreme Court. The U.S. Department of Justice is reportedly considering whether to apply for a stay of the Florida decision or take other action to prevent it from disrupting further implementation of health care reform measures, pending final resolution of the judicial challenges.

It will also be worth watching how states (26 of which joined the Florida litigation) respond to these mixed decisions with respect to their preparations for the major health care reforms slated to take effect in 2014.

If you have questions regarding the contents of this alert, please contact Edward I. Leeds at 215.864.8419 or leeds@ballardspahr.com, or Clifford J. Schoner at 215.864.8626 or schonerc@ballardspahr.com.

As the federal health care reform effort gained steam, Ballard Spahr attorneys formed an initiative to monitor and analyze legislative developments. With federal health care reform now a reality, our attorneys are assisting employers in understanding the relevant changes and planning for the future. For more information on the firm's Health Care Reform Initiative, please click here.


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