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ACA faces another challenge

Without the individual tax, the law’s constitutionality again in question.

Posted December 18, 2018

On December 14, a federal district judge sitting in Texas ruled that the Affordable Care Act (ACA) is unconstitutional. The reason behind the ruling is because, in 2012, the U.S. Supreme Court held that it was constitutional because of Congress’s power to tax individuals if they failed to obtain coverage as required by the ACA.

In 2017, however, the Tax Cuts and Jobs Act (TCJA) basically eliminated the tax when it reduced it to zero for tax years after 2018. Without that tax penalty, the basis on which the Supreme Court ruled, was put into jeopardy, as the Texas judge indicated that the law could “no longer be fairly read as an exercise of Congress’s tax power.”

If the law is nullified, almost 9 million people who currently have coverage under the ACA will lose that coverage. In addition to the requirement that individuals have health coverage, the law includes a provision allowing dependents up to 26 years old to remain on their parent’s plan, and a requirement to provide break times for breastfeeding. A change related to the law could cause employers to review their policies and make some amendments. For now, however, the law remains in place, and the case will likely be appealed.

For now, however, the law remains in force as usual, and the case will likely be appealed.

This article was written by Darlene M. Clabault, SHRM-CP, PHR, CLMS, of J. J. Keller & Associates, Inc.


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