American Benefits Council files amicus brief on ‘severability’ issue in U.S. Supreme Court health reform case

“If the Supreme Court rules that the individual mandate is unconstitutional, then the ‘shared responsibility’ provision of the law requiring employers to offer health coverage that satisfies the individual mandate should also be struck down,” according to an amicus (friend of the court) brief filed in February by the American Benefits Council.

“Virtually all public attention on this landmark case has focused on the central question of the individual mandate’s constitutionality. But another critically important issue may need to be resolved as well: if the Court ultimately rules that the individual mandate is unconstitutional, it will need to decide whether all or some parts of the rest of the law are also invalid,” said Council President James A. Klein.

“The standard the Court applies to determine if a provision of a law is ‘severable’ from another provision that has been invalidated is whether one provision can operate as Congress intended when the other is struck down. The Patient Protection and Affordable Care Act (PPACA) imposes the individual and employer requirements through a ‘shared responsibility’ framework. The text and structure of the law makes clear that Congress intended the individual mandate and employer responsibility provisions to operate together, as one comprehensive scheme of shared responsibility between employees and employers. Thus, if the individual mandate is found unconstitutional, the employer provisions must also be rejected,” said Klein.

The Council’s brief also asserts that the various insurance market reform reforms of PPACA — such as guarantee issue requirements and prohibitions on preexisting conditions — are inextricably entwined with, and not severable from, the individual mandate, since the basis for the market reforms is the understanding that virtually all Americans would be required to obtain insurance coverage. The brief does not take a position on the constitutionality of the individual mandate or other issues before the Court.

James R. Napoli of the law firm Proskauer Rose LLP is the Counsel of Record for the preparation of the amicus brief. Mark Harris and Charles Sims of Proskauer Rose LLP and James Klein, Kathryn Wilber and Paul Dennett of the American Benefits Council also assisted in the preparation of the brief.

The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council’s members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.