ObamaCare at the Supreme Court

Beginning today the Supreme Court is hearing three days of arguments on the constitutionality of the Affordable Care Act. The first issue is whether the Court can even consider the law’s constitutionality now–a legalistic argument that in the words of a lawyer challenging the law is “a kind of practical joke that the court is playing on the public.” The 1867 Anti-Injunction Act requires that a tax can only be challenged after it has been paid. The ACA’s penalty–or is it a tax?–for failing to obtain health insurance does not go into effect until 2014 and would not be payable until federal tax returns are filed in 2015, which could mean the challenge must wait. It’s an argument only a lawyer could love, with the twist as to whether the payment imposed for failure to obtain health insurance is a tax. As the NYTimes explains:

In the health care law, Congress called the required payment a penalty rather than a tax. But the penalty is contained in the Internal Revenue Code, and the health care law says it is to be “assessed and collected in the same manner” as a tax.

Mr. Verrilli, representing the Obama administration, walks a fine line. He has told the court that the administration wants a prompt ruling on the health care law and that the 1867 law should not stand in the way. Yet the administration does not want to damage its ability to rely on the 1867 law in other cases.

There are other complications. Mr. Verrilli’s argument that the penalty is not a tax for purposes of the 1867 law is in potential tension with one he will make on Tuesday, that the mandate was authorized not only by Congress’s power under the commerce clause but also by its power to levy taxes.

Mr. Verrilli argues that the name that Congress gave the payment required for violating the mandate in the health care law — a penalty, not a tax — matters for purposes of the 1867 law but is irrelevant in connection with the constitutional taxing power, where “it is the practical operation of the provision, not its label, that controls.” (emphasis additional)

As I said, it’s an argument only a lawyer could love.

Smoking and employment

Sometimes students think we make it up. Tuesday we talked about employers monitoring off-duty conduct such as smoking. After many students expressed disbelief that an employer could discharge an at-will employee for smoking–“But smoking is legal!”–I related how The Scotts Company did that very thing a few years ago. Welcome to at-will employment. The next day an alert student emailed this article from CNN.com: 39 Whirlpol workers suspended over smoking lies. The workers signed statements for Whirlpool’s insurers that they do not use tobacco “and then were seen smoking or chewing tobacco on company property.” Some may be fired–for lying about smoking, not for smoking. The company employs financial incentives to discourage smoking, charging tobacco users an extra $500 for annual health insurance premiums, practice common for large companies (with more than 20,000 employees), 16 percent of which charge higher insurance premiums to tobacco users.