Back in 1917 the Supreme Court ruled that Workers' Compensation should protect workers' like these men.

Last week we posted on how Obama’s Affordable Care Act, which would require that every American must have health insurance, has been struck down by a U.S. Circuit Court. However, the Obama administration and 26 states filed appeals against this ruling, and the Supreme Court is widely expected to rule on the appeal this fall.

The fact of the matter is, if Obama’s Affordable Care Act is upheld, it wouldn’t be the first time that the government has forced companies to provide insurance for people. The constitutionality of mandatory insurance has been challenged in courts and upheld at the highest level.

The argument that state-mandated insurance for injured workers’ was unconstitutional was made after an employee was killed in 1914. The workers’’ compensation system, in exchange for requiring employers to compensate employees for work-related injuries, exempts employers from liability beyond the limits of the insurance. Employers in 1914 said the United States Constitution prohibited state governments from forcing employers to buy such insurance. Some even called it socialism.

But the Supreme Court, in its ruling on March 8, 1917, upheld the requirement that employers must purchase workers’’ compensation insurance. The court noted that the workers’’ compensation system did “measurably limit the freedom of employer and employee to agree respecting the terms of employment” and also that “it cannot be supported except on the ground that it is a reasonable exercise of the police power of the state.”

The Court identified the law as an exercise of police powers because “laws regulating the responsibility of employers for the injury or death of employees, arising out of the employment, bear so close a relation to the protection of the lives and safety of those concerned that they properly may be regarded as coming within the category of police regulations.”

The court remarked that the new system was “intended as a just settlement of a difficult problem, affecting one of the most important of social relations, and it is to be judged in its entirety.”

The decision acknowledged the tradeoffs in the workers’’ compensation system, and determined that the system’s mandatory compensation for injured workers’ did not

  1. deprive the employer of its property without due process of law,
  2. unduly limit the right for employees and employers to contract for employment (even though they were limited a little), or
  3. violate the parties’ right to trial by jury.

These same themes are cropping up in the media when directed toward healthcare, but as of yet the workers’ compensation system of mandatory insurance has thus far been left out of the debate.