Fifth Circuit Rules Individual Mandate Unconstitutional: However, case gets one step further from the Supreme Court

On Wednesday, December 18th, The Fifth Circuit Court of Appeals ruled in a 2-1 vote that the individual mandate of the Affordable Care Act was unconstitutional.  As a refresher, the individual mandate required U.S. citizens to purchase healthcare coverage or pay a penalty.  However, the penalties were zeroed out as part of the 2017 Republican Tax Reform bill.  The zeroing out of the penalties is what initially started the legal process that the Fifth Circuit ruled on yesterday. 

              In their ruling, the court relied on the following logic: “The individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power,” the ruling said. “On the severability question, we remand to the district court to provide additional analysis of the provisions of the ACA as they currently exist.”  Severability is a legal concept that addresses whether aspects or provisions of a law can survive if one part of the law is deemed unconstitutional.  Depending on how this question is answered, it is possible that even if the individual mandate is unconstitutional, the rest of the law can remain intact.

              The key here is that the appeals court remanded the case back to the district court for further analysis.  This ultimately means a longer, more drawn out legal process. Many believed that the case would immediately go from the Fifth Circuit to the Supreme Court, setting up a dramatic legal decision on healthcare under the spotlight of the 2020 election.  However, the practical implications of yesterday’s ruling are that the case is one step further away from the Supreme Court.  It is still believed that the final decision will rest with the highest court of the land, but that may not happen until 2021 or later.  For individuals, employers, insurance carriers, health care providers, and all other parties touched by the Affordable Care Act in one way or another, all this means is that the ACA is still the law of the land.  This ruling changes nothing, and all parties should carry forward with the intent of remaining compliant with the ACA until further notice!

Tags: ACA Reporting, ACA Compliance