Verdict for Texas vs US Affordable Care Act

On June 16, 2021, the United States Supreme Court gave a verdict for Texas vs US Affordable Care Action. The Court upheld the Affordable Care Act (ACA) in the case of Texas v. United States (now referred to as California v. Texas).

The challenge brought by Texas and other Republican-dominated states alleged that the entirety of the ACA was invalid as a result of the elimination of the individual mandate penalty under the 2017 Tax Cuts and Jobs Act. With a 7 to 2 vote, the Court held that these states did not have the standing to bring the challenge to court. In layman’s terms, because the plaintiff-states were not required to pay anything under the individual mandate provision of the ACA they could not show injury, and, therefore, could not challenge the legality of that issue.

This result is not unexpected. During oral arguments held in November of last year, the Court primarily focused on standing and severability, or why other provisions of the ACA could not survive without the individual mandate, indicating that the ACA was likely to survive. Although there could be additional challenges to the ACA if interested parties can show adequate injury, for now, this ruling maintains the status quo. The decision is available in full here.

This information is provided by the compliance team of Alliant, Asinta’s employee benefits consulting Partner in the U.S.