By Amy L. Miles
This morning, the United States Supreme Court heard the first day of Oral Arguments surrounding the controversy over some provisions of the Obama Administration’s healthcare reform act known as the Affordable Care Act (ACA). In its first round, the Court must determine whether it has the jurisdiction to consider the challenges to the Act at all. The ACA, among other things, contains an “individual mandate,” which will require U.S. taxpayers above a certain minimal income threshold to maintain healthcare insurance or to pay a penalty for failing to do so. In the case of Department of Health and Human Services v. Florida, which is a consolidation of challenges to the ACA from lawsuits brought in 26 states, the court will be considering whether, among other things, the individual mandate is a constitutionally permitted exercise of legislative power. As the ACA is written, the individual mandate goes into effect in 2014 and will be fully implemented by 2016. Therefore, the lawsuits challenging the mandate were in the form of seeking injunctive relief from the courts—asking them to prohibit the federal government from implementing the mandate before it goes into effect.
The jurisdictional question that the Supreme Court must answer first is whether it has the authority to issue the injunction the various states are seeking. Under the federal tax Anti-Injunction Act (AIA), courts have absolutely no power to prevent the federal government from assessing or collecting taxes before they are actually assessed or collected. Of course, once a taxpayer is liable for paying an assessment, he or she has a right to bring a refund action in federal court. The determination of the Court’s power to decide this case will revolve around whether the penalty required by the ACA is properly classified as a tax, which would divest the Court of its injunctive power before the law is in effect, or whether it is some other non-tax penalty.
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