The U.S. Department of Justice (DOJ) under Attorney General Jeff Sessions recently announced they have no plans to defend the constitutionality of the Affordable Care Act (ACA) as a lawsuit, filed by 20 states, works its way through the court system. While the decision has no immediate impact on ACA compliance, BenefitMall will carefully monitor the case for any future impact on clients. We recommend companies still handling payroll in-house do the same.
In a letter to Speaker of the House, Sessions explained his rationale in deciding not to defend the ACA in Texas v. United States. The letter explains some of the history behind previous court cases before concluding that section 5000A(a) of the ACA will immediately become unconstitutional once the individual mandate is abolished in 2019. Sessions concludes that most of the rest of the law will also be unconstitutional as a result, though several provisions are severable from the larger piece of legislation.
The Plaintiff's Case
The plaintiffs in Texas v. United States are a group of 20 states being led by Texas. They maintain that, despite the U.S. Supreme Court finding the individual mandate constitutional based on the authority of Congress to impose taxes, that provision of the law will automatically be invalidated in 2019. They also claim that conflicting court decisions that found the individual mandate unconstitutional weighs in their favor.
Plaintiffs further argue that two other provisions of the ACA are already unconstitutional:
1. The guaranteed issue provision that forces insurance companies to offer qualifying medical insurance to patients regardless of their medical histories; and
2. The community rating provision that prevents insurance companies from basing premiums on subscriber health histories.
If the plaintiffs win the case, then that would all but put the ACA to a swift death. Those provisions that could be separated from the ACA would likely be looked at, but there is no guarantee they would remain intact. Should the plaintiffs lose, everything but the individual mandate would remain in full force.
What It Means to You
For the time being, there are no changes in store for employers other than the fact that their workers can refuse health insurance plans beginning next year. Everything else about ACA compliance continues uninterrupted. Employers still have to report on their health insurance plans, how many employees are purchasing health insurance through them, how much they are spending, and so forth.
Reporting dates also remain intact at this time. Furthermore, the IRS is still under administration orders to enforce ACA compliance in the least restrictive way possible. That means both employers and employees are being given the benefit of the doubt. That is unlikely to change regardless of the outcome of Texas v. United States.
BenefitMall Offers ACA Compliance Services
ACA compliance is likely to remain a thorny issue unless Texas and its fellow plaintiffs win their lawsuit. We are going to assume that will not happen for the sake of expediency. If it does, great. Otherwise, we will continue working on behalf of our clients who take advantage of our ACA compliance services.
We can help you maintain ACA compliance both now and in the future. If you are struggling at all, now is the time to get in touch with us. In addition to ACA compliance services, we offer payroll processing solutions, benefits administration services, innovative workers’ comp and 401(k) plans, and a limited number of back-office HR functions.
Payroll and HR doesn't have to be a drag in your business. Neither does ACA compliance. Eliminate the stress by letting us handle it for you. We really don't mind.