Taxes

Special Blog: ACA Requirements Remain in Effect!

March 26, 2019

Before you think it's the end of the Affordable Care Act, read on! Learn why the DoJ made their announcement and what it means.

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We know ACA requirements are a pain for most employers, especially small business owners. So, you may have been celebrating yesterday’s Department of Justice Announcement. Before picturing yourself tossing ACA calculations and requirements out your office window, keep in mind nothing has changed yet!

A Little Backstory

If you’re confused right now, we’ll clarify. In 2017, the Trump Administration enacted a tax code as part of the Tax Cuts and Job Acts (TCJA). Most importantly, with this tax code, the penalty for not having health insurance under the Affordable Care Act is zero. That’s right, essentially no penalty.

Why does that matter? This means the individual mandate no longer counts as “tax.” Therefore, it isn’t constitutional according to the National Federation of Independent Business (NFIB). Furthermore, since the individual mandate is unconstitutional under the NFIB, the entirety of ACA would have to go. The reason being, Congress wouldn’t have passed the Affordable Care Act without that individual mandate.

Now that you’re caught up let’s bring Judge O’Conner’s decision into the mix. U.S. District Court Judge, Reed O’Connor, ruled in December of 2018 that remaining portions of the ACA are void due to that individual mandate. Again, if the individual mandate is unconstitutional, the whole ACA would have to go.

What Happened Yesterday and Why it Matters

On March 25th, 2019, the Department of Justice announced they will uphold the Texas Federal Judge’s ruling. The DoJ thinks the District Court’s opinion is correct and submitted a new filing with the U.S Court of Appeals.

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So, long story short, keep tracking! The appeal process is a lengthy one, and if anything does change, it certainly won’t be soon. The ACA requirements remain in effect exactly as they are for now. If and when anything changes, we’ll be sure to let you know!


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