ME State Updates - 2015 Jan 16 No.01

On June 8, 2015, the U.S. Supreme Court denied certiorari in the case of Mayhew v. Burwell, 14-992. In the case, Maine’s Department of Health and Human Services sought to drop coverage under the state’s Medicaid program, MaineCare, for non-pregnant, non-disabled young adults between the ages of 18 to 20 (who are normally not required to be covered under Medicaid). The federal government argued that the state must continue offering coverage to these young adults until 2019 due to a previous agreement under the 2009 American Recovery & Reinvestment Act (ARRA) which established a “maintenance-of-effort provision” (MOE) between the state and federal government requiring the state to provide this coverage through 2010.

However, upon the passage of PPACA in 2010, states were required to freeze eligibility for Medicaid programs until 2019 or risk losing all federal Medicaid funding, essentially extending coverage for this group of young adults under MaineCare for an additional nine years. Maine previously argued that the PPACA’s MOE provision is unconstitutionally coercive under the Spending Clause, that it unconstitutionally applies retroactively to ARRA MOE provisions and that it violates Maine’s right to equal sovereignty. The U.S. Court of Appeals for the First Circuit affirmed the federal government’s decision to require MaineCare to continue coverage for these young adults, so Maine sought a U.S. Supreme Court review. However, now that the Supreme Court has denied certiorari, Maine will be required to continue to provide coverage under MaineCare for these young adults until 2019.

While not directly applicable to employers, this denial of certiorari is important for employers to be aware of since young employees who are covered under MaineCare would not trigger a penalty for the employer under the employer mandate, even if they are not offered affordable, minimum value coverage by the employer. Further, there may be questions from employees regarding covering dependents (or dropping coverage). Employers that allow employees to pay for dependent coverage with pre-tax dollars should be aware of rules under Section 125 governing additions and drops and the interaction of such plans with Medicaid programs such as MaineCare.

Mayhew v. Burwell, 14-992 »