The ongoing legal challenges to the Patient Protection and Affordable Care Act (“Affordable Care Act” or PPACA) raise an important questions for employers:  will the entire law be voided if certain provisions of the law are ruled unconstitutional?  In other words, could some requirements under the Affordable Care Act, such as an employer’s obligation to provide rest breaks and space for employees who are nursing mothers to express breast milk or an insurer’s obligation to offer dependent health coverage to age 26, simply disappear if one provision of the law is ruled unconstitutional?

The answer will likely be determined by the courts as the lawsuits wind their way through the judicial system.  The Affordable Care Act does not contain a “severability clause,” which is often standard language included in a law to ensure that, if one part of the law is ruled unconstitutional, that part will be “severed” from the rest of the law, which would remain intact.  According to a Wall Street Journal article, a Democratic aide who helped draft the law said staff members discussed such a clause, but determined that it was unnecessary.  Their position may very well be aided by a Supreme Court case decided last term.  In Free Enterprise Fund v. Public Company Accounting Oversight Board (pdf), the Supreme Court invalidated a provision of the Sarbanes-Oxley (SOX) Act without voiding the entire law, even though SOX lacks a severability clause.  The Court held that the unconstitutional provisions could be severable from the remainder of the statute because:  “‘[t]he unconstitutionality of a part of an Act does not necessarily defeat or affect the validity of its remaining provisions’ ... the ‘normal rule’ is ‘that partial ... invalidation is the required course.’”

The plaintiffs in the Florida challenge disagree and argue that the entire law should be invalidated if certain provisions are deemed unconstitutional.  The Florida case, brought by the state’s attorney general and joined by 19 other states, challenges the constitutionality of the mandate, starting in 2014, for individuals to purchase health insurance or pay a penalty (the “individual mandate”), and the requirement that states expand their Medicaid programs.  On October 14, 2010, a judge for the U.S. District Court for the Northern District of Florida denied a motion to dismiss the case and allowed the two main challenges to proceed, paving the way for oral argument in December 2010.  In a small victory for the Obama administration, the judge dismissed four additional contentions regarding the law’s invalidity. 

In responding to the argument by plaintiffs that the whole law should fall if the individual mandate is ruled unconstitutional, the White House counters that many other pieces of the legislation could stand without the mandate.  However, the administration may be placed in an untenable position if the mandate is eventually determined to be unconstitutional because, without a way to pay for the expansion of coverage in 2014, the entire law may be unworkable.   

The legal challenges are predicted to reach the U.S. Supreme Court through the appeals process, but they will likely take some time.  This leaves some employers wondering what they should do in the meantime.  As always, it is best to consult with employment or benefits counsel for individualized assessments for the best course of action.  It is expected, however, that most employers will comply with all of the dictates of the Affordable Care Act unless or until all or part of the legislation is definitively ruled unconstitutional.