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A federal appeals court ruled that the Affordable Care Act’s individual mandate is unconstitutional due to the elimination of the individual mandate penalty in 2019. The individual mandate required individuals to have health insurance for themselves and their families or pay a penalty.
The lawsuit was filed by 18 states in 2018 as a result of the 2017 tax reform law that eliminated the individual mandate penalty. In 2012, the Supreme Court upheld the ACA on the premise that the individual mandate is a valid tax. With the penalty being eliminated, it was determined that the individual mandate is no longer valid under the Constitution.
The lower court is now tasked with deciding if the ACA can remain in place without the individual mandate provision. This ruling is expected to be appealed to the Supreme Court, so it’s expected that a final decision won’t be made until this time. It is also unlikely that any ruling eliminating the ACA will be stayed pending appeal.
With these appeals pending, all existing ACA provisions will continue to be applicable and enforced. This ruling does not impact the employer shared responsibility (pay or play), 2020 exchange enrollment, and other reporting requirements. Stay tuned to our blog for the latest in this ACA news and more.
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