Health Care Reform

Under the Patient Protection and Affordable Care Act, employers with 50 or more FTEs will be assessed an annual $3,000 per employee penalty starting in 2014 if the health care coverage they provide is not affordable. Effective for months beginning Jan. 1, 2014, IRC § 4980H provides that an applicable large employer (as defined in § 4980H(c)(2) ) must pay a $3000 penalty if any full-time employee is certified to receive an applicable premium tax credit or cost-sharing reduction and either (1) the employer does not offer to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer sponsored plan (§ 4980H(a) ); or (2) the employer offers its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage that either is unaffordable within the meaning of § 36(B)(c)(2)(C)(i) or does not provide minimum value within the meaning of § 36(B)(c)(2)(C)(ii).

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In two opinions released Sept. 8, 2011, the Fourth Circuit ruled against challenges to the validity of federal health reform, the Patient Protection and Affordable Care Act, for two different procedural reasons. The judges ruled that neither Liberty University nor the state of Virginia had standing to challenge the law. The Fourth Circuit remanded both cases to their respective trial courts with orders to dismiss them for lack of subject matter jurisdiction. Neither case deals with the constitutionality of health reform’s individual insurance mandate or the law as a whole but the Liberty University decision adds to the existing division in the Federal Circuit Courts of Appeal, as discussed below.

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