This is the twenty-third issue in our series of alerts for employers on selected topics in health care reform. (Click here to access our general summary of health care reform and other issues in this series). This series of Health Care Reform Management Alerts is designed to provide an in-depth analysis of certain aspects of health care reform and how it will impact your employer-sponsored plans. This supplements our February 4, 2011 and July 13, 2011 alerts, which addressed the constitutionality of the Patient Protection and Affordable Care Act (PPACA).

Just last month we reported on the first federal appellate court decision on the constitutionality of the Patient Protection and Affordable Care Act (PPACA). In that case, the Sixth Circuit Court of Appeals upheld the individual mandate of PPACA -- requiring Americans to purchase health insurance by 2014 or face penalties -- in Thomas More Law Center v Obama. Now, on August 12, 2011, a divided three judge panel of the Eleventh Circuit Court of Appeals ruled the other way, finding (in an over 300 page opinion) that the same individual mandate of PPACA was unconstitutional -- exceeding Congress's commerce power -- in State of Florida v U.S. Department of Health and Human Services.

The Court, however, overturned a portion of the lower court's ruling by not finding the entire statute unconstitutional, stating that the individual mandate may be severed from the remainder of PPACA. They also specifically found that the expansion of Medicaid was constitutional.

Similarly to the Sixth Circuit decision, where for the first time a Republican appointed judge found PPACA constitutional, in this decision, a Democratic appointed judge joined the majority finding the individual mandate unconstitutional -- demonstrating that opinions on the constitutionality of the mandate cross the political spectrum.

The Fourth Circuit Court of Appeals is also expected to rule on this same issue. But, the current split in the federal circuit courts has made it even more likely that the U.S. Supreme Court will weigh in to resolve the issue.