ACA Survives Another Supreme Court Challenge

Hodgson Russ Employee Benefits Newsletter

The Supreme Court, in a 7-2 ruling, held that the Plaintiffs did not have standing to challenge the constitutionality of the Affordable Care Act’s (ACA’s) minimum essential coverage provision.  When the ACA was enacted, individuals could face a tax penalty if they did not obtain minimum essential health coverage.  This provision is sometimes referred to as the “individual mandate.” In 2017, the penalty for individuals who failed to obtain this coverage was reduced to $0, effectively nullifying the penalty.  In this case, Texas (along with several states and two individuals) brought suit against federal officials, claiming that without the ACA’s minimum essential coverage penalty, the individual mandate provision is unconstitutional.  The Supreme Court held that the Plaintiffs did not have standing because they did not show a past or future injury traceable to the enforcement of the individual mandate.  To have standing, a plaintiff must allege personal injury fairly traceable to the defendant’s allegedly unlawful conduct.  This marks the third time the ACA has survived a challenge in the Supreme Court since it was enacted.

California v. Texas, U.S. Supreme Court (2021).

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