Supreme Court Rejects Another ACA Challenge and Leaves ACA Intact

On June 17, 2021, the U.S. Supreme Court ruled that Texas – along with 17 other states and two individuals – lacked standing to challenge the Affordable Care Act’s (ACA) individual mandate to purchase health insurance. Congress eliminated the monetary penalty for not complying with the mandate in 2017, effectively making the ACA’s individual mandate provision unenforceable.

In a 7-2 decision, the high court found that the plaintiffs failed to demonstrate the individual mandate increased their costs and that any alleged injury from other ACA provisions was insufficient to justify standing in the case. Writing for the majority, Justice Stephen Breyer explained:

“The Constitution gives federal courts the power to adjudicate only genuine ‘Cases’ and ‘Controversies.’ That power includes the requirement that litigants have standing. Neither the individual nor the state plaintiffs have shown that the injury they will suffer or have suffered is ‘fairly traceable’ to the ‘allegedly unlawful conduct’ of which they complain.”

The two consolidated cases – California v. Texas and Texas v. United States – asked the Supreme Court to decide whether Congress’ action in reducing the individual mandate penalty to zero rendered the minimum coverage provision unconstitutional and, if so, whether the entire ACA was unconstitutional.

However, the court never got to the merits of the case, leaving the ACA intact. Therefore, for group health plans, the ACA’s mandates for preventive care coverage, ban on annual and lifetime maximums for essential health benefits, prohibition of preexisting condition exclusions, limits on waiting periods, and caps on out-of-pocket expenses will continue unchanged.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you follow the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 678-439-6236.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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