NFIB v. Sebelius and the Individual Mandate: Thoughts on the Tax/Regulation Distinction

Abstract

When Chief Justice John Roberts wrote the opinion of the Court in National Federation of Independent Businesses v. Sebelius (NFIB) explaining the constitutionality of the Affordable Care Act’s (ACA) minimum essential coverage provision (sometimes referred to as the individual mandate), he reasoned that the mandate—or, more precisely, the enforcement provision that accompanied the mandate (the Shared Responsibility Payment or SRP)—could be understood as a tax on the failure to purchase health insurance. According to this view, the enactment of the mandate and its accompanying enforcement provisions fell within Congress’s virtually unlimited power to “lay and collect taxes.” This tax-based interpretation of the individual mandate’s enforcement provisions turned out to be essential to the outcome of the case, since Roberts also concluded that, if the Court had focused on the mandate itself, it would have found the law to be unconstitutional. This is because, according to the Roberts’ opinion, the minimum coverage provision is a form of regulation that is not relevantly different from a law requiring people to purchase, say, broccoli. And such laws, both health insurance mandates and broccoli mandates, are obviously beyond Congress’s regulatory power granted by the Commerce Clause of the Constitution.