Labor & Employment News Alert

ACA: Another Court Decision but Questions Remain

January 2, 2020

By: Jill E. Hall

In a December 16, 2018 blog post, we shared an opinion from a district court in Texas holding that the individual mandate provision of the Affordable Care Act is unconstitutional because Congress eliminated the tax penalty associated with that mandate as part of the Tax Cuts and Jobs Act of 2017.  The court opined that, because the United State Supreme Court previously upheld the individual mandate as an exercise of Congress’s taxing power, the repeal of the penalty associated with the individual mandate means the government is no longer using its taxing power and, consequently, the provision is unconstitutional.  The court went on to hold that the ACA could not stand without the individual mandate provision.  Consequently, the court found that the entire law must be invalidated.

 

On appeal, the United States Court of Appeals for the Fifth Circuit agreed that the individual mandate provision of the ACA is unconstitutional, but it stopped short of declaring the entirety of the ACA invalid.  In a divided December 18, 2019 opinion in Texas v. United States, the Fifth Circuit remanded the case to the district court and instructed the court to provide more specific guidance regarding whether the remaining parts of the ACA can survive without the individual mandate.  The decision means that, for now, at least one appeals court has held the individual mandate provision of the ACA is unconstitutional in its current form.  What remains unclear, though, is whether the remaining provisions of the ACA can survive now that the individual mandate provision has been severed from the law. 

 

The case will be returned to the district court for further proceedings, and further appellate proceedings before the U.S. Supreme Court are almost certain.  The saga continues, but for now the ACA lives to see another day.