National Federation of Independent Business v. Sebelius Case Brief

Facts of the case

Amid intense public interest, Congress passed the Patient Protection and Affordable Care Act (ACA), which became effective March 23, 2010. The ACA sought to address the fact that millions of Americans had no health insurance, yet actively participated in the health care market, consuming health care services for which they did not pay.The ACA contained a minimum coverage provision by amending the tax code and providing an individual mandate, stipulating that by 2014, non-exempt individuals who failed to purchase and maintain a minimum level of health insurance must pay a tax penalty. The ACA also contained an expansion of Medicaid, which states had to accept in order to receive Federal funds for Medicaid, and an employer mandate to obtain health coverage for employees.Shortly after Congress passed the ACA, Florida and 12 other states brought actions in the United States District Court for the Northern District of Florida seeking a declaration that the ACA was unconstitutional on several grounds. These states were subsequently joined by 13 additional states, the National Federation of Independent businesses, and individual plaintiffs Kaj Ahburg and Mary Brown.The plaintiffs argued that: (1) the individual mandate exceeded Congress’ enumerated powers under the Commerce Clause (2) the Medicaid expansions were unconstitutionally coercive and (3) the employer mandate impermissibly interfered with state sovereignty.The District Court first addressed whether the plaintiffs had standing to bring the lawsuit. It determined that Brown had standing to challenge the minimum coverage provision because she did not have health insurance and had to make financial arrangements to ensure compliance with the provision, which would go into effect in 2014. The court further determined that Idaho and Utah had standing because each state had enacted a statute purporting to exempt their residents from the minimum coverage provision.The court also concluded that the Anti-Injunction Act did not bar the suit.The District Court then addressed the constitutional questions. It ruled that the individual mandate provision was not a valid exercise of Congress’ commerce or taxing powers. The court held the entire act invalid because the mandate could not be severed from any other provision. The court dismissed the states’ challenge to the employer mandates and granted judgment to the federal government on the Medicaid expansions, finding insufficient support for the contention that the spending legislation was unconstitutionally coercive.A panel of the U.S. Court of Appeals for the Eleventh Circuit affirmed 2-to-1 the District Court’s holdings as to the Medicaid expansions and the individual mandate. But it also reversed the District Court, holding that the individual mandate could be severed without invalidating the remainder of the ACA.

Why is the case important?

The constitutionality of the Affordable Care Act was challenged by an attack on the “individual mandate,” requiring individuals to purchase at least minimal health insurance coverage.


Does the individual mandate portion of the Affordable Care Act, requiring individuals to purchase a health insurance policy providing a minimum level of coverage violate the Constitution?


(Roberts, C.J.) No. The individual mandate portion of the Affordable Care Act, requiring individuals to purchase a health insurance policy providing a minimum level of coverage, is a tax and therefore does not violate the Constitution. Today the Court resolves a constitutional challenge to a provision of the Patient Protection and Affordable Care Act of 2010: the individual mandate, which requires individuals to purchase a health insurance policy providing a minimum level of coverage. The Court does not consider whether the Act embodies sound policies rather, that judgment is entrusted to the elected leaders of the nation. The Court asks only whether Congress has the power under the Constitution to enact the challenged provision. This case concerns two powers that the Constitution does grant the Federal Government (Defendant), but which must be read carefully to avoid creating a general federal authority similar to police power. Congress is authorized by the Constitution to “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Our precedents read that to mean that Congress may regulate the “channels of interstate commerce,” “persons or things in interstate commerce,” and “those activities that substantially affect interstate commerce.” The power can be expansive over activities that substantially affect interstate commerce. Congress may also “lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States.” In other words, Congress may tax and spend. This grant gives the Federal Government (Defendant) considerable influence even in areas where it cannot directly regulate. The Federal Government (Defendant) may enact a tax on an activity that it cannot authorize, forbid, or otherwise control.


The Court declined to uphold the individual mandate under the Commerce Clause, U.S. Const. art. I, § 8, cl. 3 , or the Necessary and Proper Clause, U.S. Const. art. I, § 8, cl. 18 . However, the mandate was a valid exercise of the taxing power under U.S. Const. art. I, § 8, cl. 1 . Although § 5000A ’s characterization of the shared responsibility payment as a “penalty” prevented the Anti-Injunction Act, 26 U.S.C.S. § 7421(a) , from barring the suit, that description was not binding for constitutional purposes. Factors such as the manner of collection indicated that the payment was a tax rather than a penalty. Moreover, the Court held that 42 U.S.C.S. § 1396c could not constitutionally be applied to withdraw existing Medicaid funds from a state for failure to comply with the expanded coverage requirements. The remedy was to bar the federal government from imposing such a sanction, without striking down other portions of the Act.

  • Advocates: Robert A. Long, Jr. for the Court-appointed amicus curiae (Anti-Injunction Act) Donald B. Verrilli, Jr. Solicitor General, Department of Justice, for the petitioners (Anti-Injunction Act) for the petitioners (Minimum Coverage Provision) for the respondents (Medicaid expansion) Gregory G. Katsas for the respondents (Anti-Injunction Act) Paul D. Clement for the respondents Florida et al. (Minimum Coverage Provision) for the petitioners (Severability) for the petitioners (Medicaid expansion) Michael A. Carvin for the respondents National Federation of Independent Business et al. (Minimum Coverage Provision) Edwin S. Kneedler Deputy Solicitor General, Department of Justice, for the respondents (Severability) H. Bartow Farr, III for the Court-appointed amicus curiae (Severability)
  • Petitioner: National Federation of Independent Business, et al.
  • Respondent: Kathleen Sebelius, Secretary of Health and Human Services, et al.
  • DECIDED BY:Roberts Court
  • Location: The US Capitol
Citation: 567 US _ (2012)
Granted: Nov 14, 2011
Argued: Mar 26 – 28, 2012
Decided: Jun 28, 2012
National Federation of Independent Business v. Sebelius Case Brief