Supreme Court Upholds Affordable Care Act

Landmark Desicion Was 5-4

ObamacareIn a landmark 5-4 decision released this morning, the U.S. Supreme Court has upheld the core parts of sweeping health care reforms found in the Patient Protection and Affordable Care Act, including the much-publicized individual mandate. In essence, the High Court ruled that the individual mandate – which requires Americans to buy health insurance beginning in 2014 or face a penalty – can be applied as a tax, although questions remain as to whether enforcement is even possible.

Chief Justice John Roberts joined Justices Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor in the majority opinion, while Justices Samuel Alito, Anthony Kennedy, Antonin Scalia and Clarence Thomas dissented. "It is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income but choose to go without health insurance," Roberts wrote. "Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness."

While the ruling undoubtedly affects all Americans, it has particular ramifications for business owners. Most significantly, by 2014, firms with more than 50 full-time employees will have to provide health insurance coverage to employees or face large fines. However, also under the law, some smaller companies with fewer employees can be given a tax credit to offset costs of having to provide health insurance to workers. Roughly six million small businesses would qualify for the tax credit, analysts expect.

The National Federation of Independent Business (along with 26 U.S. states) was a plaintiff in the Supreme Court case and argued against the reforms, saying some of its members had already endured increases of 20% to 40% in health care premiums since the Affordable Care Act – also known as Obamacare – was passed by Congress and signed into law by President Obama. Other business advocacy groups, though, have supported the act, believing it allows for funding that will help create jobs and improve the economy.

Follow Counselor Promogram for continuing coverage of the decision as well as reaction from the ad specialty industry.