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Aon Hewitt Washington Report

Aon Hewitt Washington Report

April 2, 2012

House Approves Budget Plan; Includes Medicare Provisions and Repeal of Affordable Care Act

The House passed the Republican fiscal 2013 budget blueprint (H. Con. Res. 112) with a 228-191 vote on March 29, 2012. The budget plan, authored by House Budget Committee Chairman Paul Ryan (R-WI), would turn Medicare into a premium support system and make Medicaid a block grant program. The measure would raise Medicare's eligibility age from 65 to 67 over a decade beginning in 2023, and repeal the Patient Protection and Affordable Care Act (Affordable Care Act). The budget plan also includes a deficit-neutral reserve fund for a permanent Medicare physician payment fix, but funding details are not provided. The bill moves to the Senate, where it is not expected to advance.

A copy of H. Con. Res. 112 is available
H. Con. Res. 112 is available .

Congress Passes JOBS Act; President Expected to Sign

On March 27, 2012, the House voted 380-41 to approve the Jumpstart Our Business Startups (JOBS) Act (H.R. 3606), which would loosen securities reporting and registration requirements to ease capital formation for small businesses. The bill also includes provisions that would exempt companies with less than $1 billion in revenue from say-on-pay rules and pay-versus-performance and pay ratio disclosure requirements. The Senate passed the bill March 22, and President Obama is expected to sign it into law this week.

The full text of H.R. 3606 is available
H.R. 3606.

The White House Statement of Administration Policy on H.R. 3606 is available
H.R. 3606 - Jumpstart Our Business Startups Act.

EEOC Issues Final Rule Addressing "Reasonable Factors Other Than Age" Under ADEA

On March 30, 2012, the Equal Employment Opportunity Commission (EEOC) issued a final rule to amend its Age Discrimination in Employment Act (ADEA) regulations concerning disparate impact claims and the "reasonable factors other than age" defense (RFOA). The final rule incorporates comments that were received from two previous proposed rules that were published in March 2008 and February 2010. The final rule clarifies that the ADEA prohibits policies and practices that have the effect of harming older individuals more than younger individuals, unless the employer can show that the policy or practice is based on a RFOA. The rule explains the meaning of the RFOA defense to employees, employers, and courts, and makes EEOC’s regulations consistent with two Supreme Court decisions that recognized ADEA disparate impact claims and put the burden on employers to prove the act's RFOA defense (Smith v. Jackson,(2005) and Meacham v. Knolls Atomic Power Lab.,(2008)).

The final rule applies to private employers with 20 or more employees, state and local government employers, employment agencies, and labor organizations. The final rule is effective on April 30, 2012.

The EEOC final rule is available
Federal Register/ Vol. 77, No. 62.

The EEOC news release is available
Press Release: EEOC Issues Final Rule on "Reasonable Factors Other than Age" Under the ADEA .

The EEOC “Questions and Answers on EEOC Final Rule on Disparate Impact and Reasonable Factors Other Than Age Under the ADEA” is available
Questions and Answers on EEOC Final Rule on Disparate Impact and “Reasonable Factors Other Than Age” Under the Age Discrimination in Employment Act of 1967 .

USCIS Requests Comments on Form I-9 Revisions

On March 27, 2012, the U.S. Citizenship and Immigration Services (USCIS) announced that it was seeking comments on its revised Form I-9, the form that is required for employers to verify the employment eligibility of all new hires. USCIS indicated that the changes include expanded instructions and a revised layout; new, optional data fields to collect the employee's email address and telephone number; and new data fields to collect the foreign passport number and country of issuance. According to USCIS, comments should focus on whether the collection of the information is necessary; whether USCIS's estimate of the burden of collecting the information is accurate; whether the quality, utility, and clarity of the information to be collected can be enhanced; and whether the burden of information collection can be minimized. Comments are due by May 29, 2012.

The link to the USCIS notice of information collection is available
Federal Register/ Vol. 77, No. 59.

The USCIS news release is available
USCIS Seeks Public Comment on Revisions to Employment Eligibility Verification Form I-9 .

The Form I-9 “Table of Changes” is available
Form I-9, Table of Changes .

The current version of Form I-9 is available
I-9 Central Home .

Supreme Court Hears Oral Arguments on Affordable Care Act

The United States Supreme Court heard oral arguments this week in the case of Florida v. HHS, the federal case that will decide whether—and how much of—the Patient Protection and Affordable Care Act (Affordable Care Act) will survive. The oral arguments are the last public step in the legal process that will likely culminate in a decision from the Supreme Court by the end of June.

Plaintiffs, who include 26 states and the National Federation of Independent Businesses (NFIB), argued to the Court that the Affordable Care Act's mandate that most Americans purchase health insurance or pay a penalty is unconstitutional and that the rest of the Act must be struck down along with the individual mandate. The United States argued that the mandate is a proper exercise of the federal government's power under the Commerce Clause of the United States Constitution. In addition to arguments over the individual mandate, the parties argued to the Court over: whether the Justices could hear the case now under the Anti-Injunction Act (AIA); what parts of the Affordable Care Act could be severed from the individual mandate if the mandate were held unconstitutional; and whether the Affordable Care Act's provisions for states' expansion of Medicaid eligibility is unconstitutional.

Constitutionality of the Individual Mandate

Most of the attention this past week centered on the second day of oral arguments, in which the parties argued over whether the individual mandate was a proper exercise of the government's power to regulate commerce under Article 1 of the Constitution. The government argued that the individual mandate is constitutional under the Commerce Clause. United States Solicitor General Donald Verrilli stated that "health insurance has become the predominant means of paying for health care in this country[, but] for more than 40 million Americans who do not have access to health insurance either through their employer or through government programs such as Medicare or Medicaid, the system does not work." In response, Paul Clement, lead attorney for the petitioners, argued that the individual mandate "represents an unprecedented effort by Congress to compel individuals to enter commerce in order to better regulate commerce."

Severability of the Individual Mandate

In the last day of argument, the Court heard both sides argue over whether, if the individual mandate is struck down, the rest of the Affordable Care Act should be permitted to stand or, alternatively, whether the Court must strike down some or all of the Affordable Care Act if the Court rules that the mandate is unconstitutional. Deputy Solicitor General Edwin Kneedler argued that, if the Court strikes down the individual mandate, only the community rating and guaranteed issue provisions of the Affordable Care Act should be struck down with it, calling these provisions "inseverable from the [individual mandate]." In reply, Mr. Clement argued that the entire Affordable Care Act must be stricken if the individual mandate is unconstitutional, telling the Court that "those provisions that have the constitutional difficulty are the very heart of this Act" and that what remained would be "a hollowed-out shell."

Medicaid Expansion

Also on the last day of argument, the Court heard petitioners and the government argue over whether the proposed expansion of Medicaid is unconstitutional. The plaintiffs argued that the Medicaid provision should be stricken because it impermissibly coerces the states in violation of the Tenth Amendment. In response, the government argued that the Medicaid provisions of the Affordable Care Act merely encourage voluntary compliance by the states.

Anti-Injunction Act

The first day of oral argument centered on whether the Supreme Court could hear a challenge to the law's constitutionality or whether, under the AIA, the plaintiffs had to wait until they pay the tax before challenging the law. The arguments centered around whether the fine for not buying health insurance is a penalty or a tax. Because the petitioners and the government both agreed that, for purposes of the AIA, the penalty was not a tax, the Court appointed separate counsel to argue that the AIA applied in this case.

Conclusion

Oral arguments before the Supreme Court often serve as a forum in which the Justices can press the parties to elaborate on their arguments, probe for strengths and weaknesses on either side, and confirm the Justices' understanding of each side's positions. Although much of the commentary from this past week centered around which side "won" and which side "lost," many commentators cautioned that, given the nature of oral arguments, it is often difficult to determine the ultimate position of any particular Justice from the questions posed in oral argument. However, most commentators agreed that, given the week's proceedings, the Court, rather than postpone a decision on the merits, is likely to render a definitive decision by the end of June.

More Information

The Supreme Court’s Affordable Care Act web page, which includes audio and transcripts of the oral arguments, is available
Patient Protection and Affordable Care Act Cases.