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Affordable Care Act Ruled Unconstitutional – But the Law Stands for Now

ACA Declared Unconstitutional

On Friday, December 14, 2018, a federal judge ruled that the entire Affordable Care Act (ACA) is unconstitutional. Last year, a change in the federal tax law eliminated or zeroed out the individual mandate penalty. The individual mandate penalty imposed a tax penalty on individuals who did not have acceptable health insurance coverage. Mandatory coverage was a core part of the original (ACA) law and the Supreme Court has upheld the ACA as constitutional based upon Congress’s taxing power.

Because the mandate has been zeroed out, it no longer generates revenue as a tax. The argument in the court is that since the mandate is essential to the law it cannot be separated from the ACA and it makes the entire ACA invalid.

Note that this ruling was a declaratory judgement, meaning that it is not binding or enforceable at this time. The ruling is expected to be appealed and the process could take as long as a year. For now, the White House announced that the ACA will remain in place until a final decision is made. All existing ACA provisions will continue to be applicable. The ruling doesn’t impact the 2019 Exchange enrollment, employer shared responsibility (pay or play) penalties, or related reporting requirements.

Download the bulletin for more details and stay tuned to our blog for future ACA updates.

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National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Erin Woulfe

Erin Woulfe

Erin Woulfe likes to write about things that matter. Keeping her finger on the pulse of what’s happening in the public sector world, she blogs about the latest legislative news and employee benefit trends that affect our school, city and county clients. She’s been with NIS since 2002. “I love connecting to our clients and providing them with the tools they need in order to administrate their plan,” says Erin. “Whether that be materials to educate their employees on certain benefits, how to effectively communicate change within an organization, or providing tips and how-to’s to help them make their job easier.”