On June 17, 2021, the U.S. Supreme Court rejected a lawsuit challenging the constitutionality of the Affordable Care Act’s (ACA) individual mandate. This is not the first time the high court has heard oral arguments on this topic. In 2012, they upheld the ACA on the basis that the individual mandate is a valid tax. In that case, with the penalty’s elimination, the appeals court in this case determined that the individual mandate is no longer valid under the U.S. Constitution.
This latest lawsuit, filed back in 2018, by 18 states as a result of the 2017 tax reform law that eliminated the individual mandate penalty. The Supreme Court determined that the plaintiffs in this case did not have standing to sue, meaning that they did not show they suffered any injury as a result of the elimination of the individual mandate penalty and, therefore, do not have a legal right to sue.
The Court did not make any determinations on any other issues in the case, including the validity of the individual mandate or whether the rest of the ACA can be severed from the individual mandate provision. As a result, the ACA as it exists will remain in place, so it is business as usual for employers and their medical insurance plans.
Should you have any questions about this newsletter, please reach out to our Compliance Team at BenefitsCompliance@capgroupfinancial.com