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July 26, 2013

HR Fact Friday: Fourth Circuit Says ACA Employer Mandate Valid, Insurance Regulation Within Commerce

The U.S. Court of Appeals for the Fourth Circuit July 11 declared the Affordable Care Act’s employer mandate a valid exercise of Congress’s power to regulate commerce under the commerce clause of the U.S. Constitution (Liberty Univ. Inc. v. Lew, 4th Cir., No. 10-2347, 7/11/13).

The mandate is “simply an example of Congress’s longstanding authority to regulate employee compensation offered and paid for by employers in interstate commerce,” the court held in an opinion co-authored by Judges Diana Gribbon Motz, James A. Wynn, and Andre M. Davis.

The ruling comes in a case filed by Liberty University Inc. and two individual plaintiffs that challenged both the individual and employer mandates.

The employer mandate requires employers with more than 50 full-time employees to provide health care coverage to employees and their dependents. If an employer fails to do so, or fails to offer coverage that meets the mandate’s affordability requirements, it would be required to make an “assessable payment” collected by the Treasury Department in the same manner as a tax.

The Obama administration recently announced it will delay implementation of the employer mandate until 2015.

Source:  Bloomberg BNA, www.bloomberg.com, Mary Anne Pazanowski

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