On January 31, 2011, a federal district court judge in Pensacola, Florida ruled that the individual mandate in the Patient Protection and Affordable Care Act (PPACA) is unconstitutional. The judge further ruled that this provision was not severable, and therefore struck down the entire law, although his ruling stopped short of halting the operation of PPACA going forward. This is the second federal district court judge to find the individual mandate component of PPACA to be unconstitutional (although the first, a district court judge in Virginia, upheld the remainder of the law). Previously, two other federal judges upheld the individual mandate as constitutional. These conflicting decisions are setting up what many expect to be an eventual Supreme Court hearing on the constitutionality of the individual mandate.

The individual mandate, which requires individuals to either purchase health insurance coverage or pay a tax, is effective in 2014. While the individual mandate only makes up a portion of the legislation, it is considered essential to the overall effectiveness of the health insurance exchanges. Additionally, because this provision is not “severable” from the remainder of the legislation, a ruling against the individual mandate could potentially overturn PPACA entirely.

On the legislative front, congressional Republicans have intensified efforts to “repeal and replace” PPACA. In mid-January, House Republicans voted to repeal PPACA, but Senate Democrats are not expected to take up the Bill. Congress is, however, expected to repeal or modify small portions of the legislation, or refuse to appropriate funding for certain components. For instance, President Obama called on Congress to repeal the expanded 1099 reporting requirement, which would require businesses to issue a Form 1099 to any person or corporation providing goods or services in excess of $600. Two separate bills are currently working their way through Congress to eliminate the new 1099 requirement.