Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
On December 14, 2018, a Texas federal court declared the entire Affordable Care Act (ACA) unconstitutional. Despite this broad holding (and clickbait headlines), employers should not expect to see any significant changes to the ACA in the near future.
In Texas v. United States of America, Judge Reed O’Connor held that the individual mandate (previously upheld as valid under Congress’ power to tax) is no longer valid due to the reduction of the tax to $0 last year under the Tax Cut and Jobs Act. Judge O’Connor further ruled that the individual mandate was essential to the ACA, and if it fails, the entire statute fails. However, he did not issue an injunction invalidating the law, and the White House press secretary stated: “We expect this ruling will be appealed to the Supreme Court. Pending the appeal process, the law remains in place.”
The appeal process may take years and with the Democrats taking control of the House of Representatives, it is likely that no action will be taken in the short term to change the current status of the ACA.
