Employers have a new health care reform deadline to add to their calendars. Last week, the Department of Health and Human Services (HHS), the Department of Labor (DOL), and the Department of the Treasury issued final regulations under the Patient Protection and Affordable Care Act that are intended to help:

• individuals easily understand their health coverage and be able to pick their best coverage options; and
• employers determine what the best coverage option is for their businesses and their employees.

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Yesterday, in one of its first rulings of 2011, the U.S. Supreme Court unanimously held that medical residents are considered employees when it comes to social security taxes. In Mayo Foundation for Medical Education and Research v. United States, Mayo challenged regulations issued by the Treasury Department that clarify what types of students are not exempt from paying social security taxes.

Under the regulations, medical residents (and other students) who work 40 hours or more per week were considered full-time employees instead of students. Mayo asserted that the Treasury Department should have to look at each employee’s situation on a case-by-case basis to determine what the employee does and why. The Court determined, however, that the Treasury Department’s “full-time employee rule” is reasonable because the regulations distinguished between workers who study and students who work and that focusing on the hours spent working versus the hours spent studying is a sensible way to make such a distinction.

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