ACA UPDATE: What the Texas Court Ruling Means

On Friday, December 14th, a federal district court judge in Texas made national news by holding the Affordable Care Act (ACA) unconstitutional.   In Texas, et al. v. United States of America, U.S. District Judge Reed O’Connor agreed with 20 plaintiff states, led by Texas and held that when Congress removed the individual mandate penalty under the Tax Cuts and Jobs Act (effective January 1, 2019) the constitutionality of the mandate under Congress’ taxing power dissolved. As such, the entire law has been rendered unconstitutional under this ruling.

Despite the ruling, the ACA currently remains intact and applicable stakeholders, including employers, should continue to meet compliance obligations as required by law.  Essentially, the ruling simply starts another round of court challenges to the law.

Key Takeaway:

Employers are advised to continue meeting all of their obligations under the requirements of the Affordable Care Act.  Our compliance team will do outreach in the event that the law does change.

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