Facts

  • A Texas judge on the U.S. District Court, Judge Reed O’Connor, agreed with a group of 20 states and their Republican governors or legislatures—that argued the constitutionality of the ACA law’s individual mandate dissolved when Congress removed the tax penalty for the uninsured.
  • In 2012, the Supreme Court upheld the law and its mandate requiring people to purchase insurance, claiming it fell within Congress’ taxation power. But O’Connor said when the tax penalty was removed, so was the central argument upholding the 2010 law’s constitutionality.

Judge O’Connor’s ruling declared not only the individual mandate, but all of ACA law, unconstitutional.

 

What Now?

  • For now, the answer is nothing. The ACA will remain in place while the law’s future is handled in the courts, a process that could take months or years to resolve.
  • People who bought coverage on the healthcare exchanges before Saturday’s deadline will be insured for 2019.

 

Speculation

  • The Trump administration’s Justice Department will not likely appeal the ruling.
  • A coalition of democratic states led by California Attorney General Xavier Becerra vowed to continue fighting to preserve ACA and to “fight in court.”
  • House Minority Leader Nancy Pelosi, D-Calif., said Democrats will direct House counsel to defend the ACA when they take control of the chamber in January.
  • The case would then go to the U.S. Court of Appeals for the 5th Circuit, which is dominated by judges nominated by Republican presidents.
  • A Yale Law professor, Abbe Gluck, said the 5th Circuit will almost certainly grant a stay, keeping O’Connor’s ruling on hold pending their decision.
  • A three-judge panel for the 5th Circuit would then accept briefs and hear oral arguments in the case before giving their decision. From there, it’s possible the entire panel of 5th Circuit judges will ask to review the case.
  • If the decision is overturned, the Supreme Court might not accept the case. Since many legal experts think the ruling is legally weak, “the Supreme Court may not desire another politicized Obamacare showdown.”

 

Apex Guidance

  • Please proceed business as usual in adherence to the ACA “employer mandate” rules and regulations.
  • Complete your ACA-IRS reporting.
  • Remember, the IRS continues to issue penalties under the ACA shared responsibility provision (employer mandate).

 

 

 

Source: © 2018 Zywave, Inc.