The ACA Is Invalidated But Don't Start Taking Action Yet

On December 14, 2018, a Texas federal court declared the Affordable Care Act (ACA) completely unconstitutional. Although U.S. District Court Judge Reed O’Connor overturned the law nationally, the ruling does not require employers to change their practices in regards to benefit administration. In fact, the law stays in place for the conceivable future.

You may recall that prior challenges to the ACA were unsuccessful as the Supreme Court found the individual mandate to be an appropriate exercise of the government’s power to tax.  However, in late 2017, Congress passed a tax reform law that removed the ACA penalty for failing to comply with the individual mandate.  Accordingly, the Texas Attorney General, along with a group of eighteen other attorneys general and a governor, initiated a lawsuit battling the ACA arguing that taking away the “tax” made the entire law unconstitutional.

However, at this point employers should not make any changes.  A request has been made for a stay of the judgment and an appeal of the district court decision is pending.  The decision will be reviewed by a Circuit Court of Appeals and potentially by the Supreme Court of the United States.  Accordingly at this time, we are not recommending that employers make any changes to their policies and practices under the ACA.

aca Affordable Care Act aka ObamaCare document with a legal gavel

If you find yourself challenged with questions regarding the Affordable Care Act decision please do not hesitation to contact Laddey, Clark & Ryan’s Employment and Labor Practice Group: Thomas N. Ryan Esq. (tryan@lcrlaw.com), Ursula H. Leo, Esq. (uleo@lcrlaw.com), Jessica A. Jansyn, Esq. (jjansyn@lcrlaw.com), or Nicole C. Tracy, Esq. (ntracy@lcrlaw.com). Our attorneys can also be reached by phone at (973) 729-1880.