Last Updated on October 9, 2020 by G. T. HR

DOJ Urges Courts to Strike Down Affordable Care Act

As you probably know, the Affordable Care Act has gone through a number of court challenges since it went into effect in 2010. Find out where the ACA is in the court system and if its status affects your business.

The Current Status of the ACA

One of the latest challenges relates to the elimination of the penalty for individuals who do not have medical insurance – called the individual mandate.

2017 – Elimination of the Individual Mandate

In 2017, Congress eliminated the penalty associated with the individual mandate. Therefore, while the requirement for individuals to have insurance remained, there is no penalty for failing to obtain the insurance.

2018 – 5th Circuit Appellate Court

In December 2018, U.S. District Judge Reed O’Connor, of the Northern District of Texas, ruled the elimination of the individual mandate penalty rendered the entire Affordable Care Act unconstitutional.

As you can imagine, this verdict was almost immediately appealed to the 5th U.S. Circuit Court of Appeals where it currently resides.

2019 – The Department of Justice Reverses Course

At the District Court level, the U.S. Department of Justice (DOJ) did not defend the constitutionality of the ACA. However, it did hold that certain components of the ACA should not be struck down as unconstitutional. This includes the individual mandate.

However, on March 25, 2019, the DOJ reversed its course. They issued a brief supporting the lower court’s decision that the ACA should be struck down as unconstitutional. Then, on May 1, 2019, the DOJ urged the federal appeals court to strike down the ACA in its entirety.

With the DOJ refusing to defend the law, a coalition of Attorneys General of several states, including California, have banded together to defend he law in the appeals process. In addition, the Democrat-led House of Representatives has also moved to intervene.

The Future of the ACA

We expect that oral arguments in the appeal will begin in July 2019, so we are several months away from a decision. Once they make a decision in the appeal, the losing side will most likely appeal the case to the Supreme Court.

The Supreme Court would then need at least four justices to agree to hear the case. If four justices agree to the hear the case, they anticipate that the earliest the Supreme Court may hear the case is 2020.

What Should Businesses Do About the ACA?

While the cases are ongoing, the ACA remains in effect. Therefore, it is important that business owners comply with the ACA and are diligent in meeting the Act’s requirements. If not, they are potentially at risk of significant penalties.

Stay ACA Compliant with MyHRConcierge

Our specialty is keeping small to medium sized businesses in compliance with state and federal labor regulations.

To learn more about how we can help your business minimize ACA compliance risks as well as other human resources solutions, contact MyHRConcierge for a free consultation.

Chris Cooley is co-founder of MyHRConcierge and SMB Benefits Advisors. MyHRConcierge offers HR and compliance services including support for terminating and offboarding employees, COBRA administration and contesting state unemployment insurance claims. MyHRConcierge specializes in helping small to mid-sized businesses throughout the U.S. Chris can be reached at 855-538-6947, ext. 108 or at ccooley@myhrconcierge.com.