Supreme Court Rejects Challenge to ACA
Author: David B. Weisenfeld, XpertHR Legal Editor
June 17, 2021
The Supreme Court today dismissed a closely watched challenge to the Affordable Care Act (ACA), and issued an opinion that ensures the health care law will remain in place. A group of 18 states led by Texas had sought to have the entire ACA struck down based on its minimum essential coverage provision (known as the individual mandate).
But in a 7-2 ruling, the Supreme Court held that the states lacked standing to challenge the provision because they had suffered no injury. In an opinion authored by Justice Stephen Breyer, the Court noted that Congress amended the ACA in 2017 by setting the amount of the penalty for those who fail to buy or maintain health insurance coverage to $0.
Since the IRS can no longer seek a penalty from those who fail to comply, the Court explained that there is no means of enforcement and therefore no injury. The states claimed they had suffered a significant burden by having to offer their full-time employees minimum essential coverage under an eligible employer-sponsored plan. However, the Court countered that the states could not show any injury that was directly traceable to any actual or possible unlawful government conduct.
Writing for the dissenters, Justice Samuel Alito said the ACA imposes many burdensome obligations on states in their capacity as employers and observed that the states challenging the law collectively had more than 1 million employees. He called the individual mandate a "critical component" of the ACA's design that led to substantial expenses for the states.
Earlier this month, the Department of Health and Human Services released a report showing that a record 31 million Americans have health coverage through the ACA. With the Supreme Court's ruling, their coverage remains intact.