Supreme Court Upholds the ACA – Again
On June 17, 2021, the U.S. Supreme Court upheld the Affordable Care Act (ACA) for the third time. Earlier challenges to the ACA failed in both 2012 and 2015.
This time around, 18 states (led by Texas) argued that the ACA was unconstitutional because Congress had reduced the law’s individual mandate penalty to zero starting in 2019. Eliminating the penalty rendered the individual mandate invalid, they argued, so the entire ACA must be struck down. On the other side, California (along with 20 other states) argued that the zeroed-out penalty did not require anyone to act so it was not unconstitutional and, regardless the ACA’s individual parts stood on their own with or without the individual mandate.
In California v. Texas, the Supreme Court ruled that the plaintiffs did not have standing to bring the case. “To have standing, a plaintiff must ‘allege personal injury fairly traceable to the defendant’s allegedly unlawful conduct and likely to be redressed by the requested relief,’” wrote Justice Breyer. “No plaintiff has shown such an injury,” the Court concluded in a 7—2 decision. In other words, neither Texas nor any of the plaintiffs had suffered any harm, so they had no basis on which to challenge the ACA.
The Court did not rule on any aspects of the ACA itself.
In summary, there are no changes in the ACA or how it operates. All current provisions – including the employer mandate (so-called “play or pay”), employer reporting requirements, and protections for pre-existing conditions – remain unchanged.
Kathy Berger is Mineral’s principal benefits consultant. She is a Certified Employee Benefits Specialist (CEBS) with over 25 years of experience working with brokers and employers. Kathy uses her extensive knowledge of ERISA, HIPAA, the ACA, and other benefits laws and regulations to assist our clients with practical information in clear language.