Wagner Header

The Wagner Law Group Description 

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 


Established in 1996, The Wagner Law Group has 19 attorneys engaged exclusively in employee benefits, estate planning and employment law. Five of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.






Contact Info

The Wagner Law Group


Massachusetts Office 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

Florida Office 

Tel: (561) 293-3590
Fax: (561) 293-3591
7121 Fairway Drive
Suite 203
Palm Beach Gardens, FL 33418


New York Office

Tel: (716) 650-5987

Fax: (716) 633-0301

333 International Drive

Suite B-4

Williamsville, NY 14221


San Francisco Office

Tel: (415) 625-0002

Fax: (415) 829-4385

315 Montgomery Street

Suite 902

San Francisco, CA 94104




June 28, 2012 


 PPACA Survives Constitutional Challenge in Supreme Court









The U.S. Supreme Court has rejected most constitutional challenges to the Patient Protection and Affordable Care Act ("PPACA"), leaving the law's individual mandate intact.


Individual Mandate.  PPACA's individual mandate requires most Americans to carry health insurance or pay a penalty to the IRS, starting in 2014.  Although the Court found that Congress did not have the power to impose the individual mandate under the Commerce Clause, it held that Congress could enact the individual mandate under its taxing power.


PPACA describes an individual's "shared responsibility payment" for not having health insurance as a "penalty," not a "tax."  Nevertheless, the Court held that the shared responsibility payment could be treated as a tax for constitutional purposes.  The Court noted that the payment is not so high that individuals have no choice but to buy health insurance and that the payment is collected solely by the IRS through its normal means.  The Court read Congress's choice of language- stating that individuals "shall" obtain insurance or pay a "penalty"-as imposing a permissible tax on those who go without insurance.


Employer-Responsibility Penalty.  In addition to invalidating the individual mandate, the dissenting justices would have invalidated the employer-responsibility penalty (as well as other parts of PPACA, such as health insurance exchanges).  The employer-responsibility penalty requires employers with at least 50 employees to provide health insurance options that meet minimum criteria or face the possibility of a monetary penalty, if one of their employees qualifies for subsidized coverage and buys health insurance through an exchange. 


Without the individual mandate and other parts of PPACA, the dissenting justices found that preserving the employer-responsibility assessment would have upset the PPACA's design of "shared responsibility."  This would leave employers as the only parties bearing any significant responsibility, and that was not intent of Congress.  However, because the Court upheld the individual mandate, the employer-responsibility penalty was also upheld.


Medicaid Expansion.  PPACA required states to either expand Medicaid eligibility to more lower-income people or lose all federal Medicaid funding.   The Court held this choice to be unconstitutional.  However, the Court did hold that the federal government may withhold those additional federal funds available under PPACA from states that refuse to comply with PPACA's Medicaid expansion.


Bottom Line.  Now that the PPACA has survived the constitutional challenges, its ultimate fate will be determined through the political process.  PPACA will certainly be a key issue in the federal elections this November.  


As the Supreme Court's decision leaves PPACA virtually untouched, employers should have their plan documents reassessed by qualified employee benefit professionals to ensure compliance with the law. 




This Newsletter is protected by copyright. Material appearing herein may be reproduced with appropriate credit.


Pursuant to Internal Revenue Service Circular 230, we hereby inform you that any advice set forth herein with respect to US federal tax issues is not intended or written by The Wagner Law Group to be used and cannot be used, by you or any taxpayer, for the purpose of avoiding penalties that may be imposed on you or any other person under the Internal Revenue Code.


This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.