written by Patti Stoner
The much anticipated Supreme Court ruling on the Health Care Act has been rendered today. In a split decision 5-4, Chief Justice Roberts wrote the high court’s opinion that Act was lawful for Congress to enact. They uphold the individual mandate aspect of the law.
Justice Roberts wrote “The penalty for failing to carry insurance possesses “the essential feature of any tax,” producing revenue for the government.” The label of “penalty” used in the mandate of the law was considered to function like a tax. It is used in the same manner as cigarette taxes to discourage use of tobacco. It is used to create incentives in behaviors.
The court did, however, find one part of the law unconstitutional. The federal government cannot put sanctions on states’ existing Medicaid funding if the states decline to go along with the Medicaid expansion.
Now is the time to review the tax aspects of this reaffirmed law to you and your business. Some of these aspect take effect in 2013, others begin in 2014. Talk to your tax professional today. Watch for further updates on this law in our newsletter and our blog.