Last Friday’s ruling by a Texas federal district court judge does not have any effect on the Affordable Care Act (ACA) and how it operates. All current provisions of the ACA, including the employer mandate, protections for pre-existing conditions, and eligibility for children up to age 26, continue to apply. The federal government has posted the following statement on healthcare.gov: “Court’s decision does not affect 2019 enrollment or coverage.”
In Texas v Azar, Judge Reed O’Connor of the Federal District Court for the Northern District of Texas ruled that last year’s tax law change that reduces the ACA’s individual mandate penalty to zero starting in 2019 means that the mandate “can no longer be sustained.” The judge’s opinion goes on to say that the individual mandate is essential to and inseverable from the ACA, and without the mandate the entire law is invalid. Note, however, that Judge O’Connor does not enjoin the ACA. That means that the entire ACA remains in effect, and unchanged, nationwide.
The decision in Texas v Azar will be appealed. It is expected that the case will be heard by the Fifth Circuit Court of Appeals and then eventually wind its way up to the U.S. Supreme Court. It may be worth noting that five Supreme Court justices, including Chief Justice John Roberts, who upheld the ACA in both 2012 and 2015, continue to sit on the high court.
To recap, there has not been any change in the ACA. All requirements pertaining to employers, including the employer mandate (so-called play or pay) and employer information reporting rules, continue in effect.
ThinkHR will continue to monitor and report on ACA developments that impact employers and their group health plans.