Texas Court Strikes Down ACA

A Texas federal judge ruled late Friday that the health coverage of some 20 million Americans in limbo by ruling Obamacare as unconstitutional.  The entire Affordable Care Act must be scrapped because Congress repealed the individual  mandate penalty for failing to obtain insurance coverage last December as part of the Tax Cuts and Jobs Act.

Why it matters: The ruling, which will appealed, would be particularly perilous for states like New York that have fully embraced its provisions and receive billions in federal funding tied to it.

3 things that wont change for Employers:

1) There is no change to the law. A statement from White House that pending the appeal process, the law remains in place. ACA reporting requirements remain and penalties are unchanged.

2) Texas ruling expected  to be overturned. The ruling will be appealed, ultimately to the Supreme Court if it gets that far and may take years to appeal. The Supreme Court has consistently upheld the constitutionality of the ACA twice in previous court challenges, and experts (including those who are both for and against the law) widely expect the Court to do the same in this case.

3) ACA is actually becoming more embraced overall. More states are choosing to expand Medicaid, some are creating their own individual mandates, and employer mandate penalties are being enforced by the IRS. Any change to the law that would take away affordable healthcare coverage from those who currently receive it could be a major political challenge for the governing party.

For  ALE (applicable large employers) who are preparing for 2018 Forms 1095 and 1094 reporting, the Texas ruling has no immediate impact. The Employer Mandate is in full effect and the IRS continues to assess potential penalties for non-compliance. We’ll keep our current clients informed of any changes of substance.

If you would like to know more about MMS Corp and Health Care Reform for your company, contact us today.

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