Article

DOJ now supports invalidating entire Affordable Care Act

April 10, 2019
| United States
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By Anu Gogna and Ben Lupin

On March 26, 2019, the U.S. Department of Justice (DOJ) changed its position and submitted a letter to the 5th Circuit Court of Appeals agreeing with a district court’s ruling to strike down the entire Affordable Care Act (ACA) as unconstitutional. Prior to that letter, the DOJ had been arguing that the courts should remove the individual mandate from the ACA while letting the rest of the law stand.

By way of background, attorneys general from Texas and other states challenged the constitutionality of the individual mandate and, with it, the ACA in its entirety in 2018. In Texas v. Azar, the federal district court concluded that, since Congress eliminated the individual mandate penalty (as of January 1, 2019), the individual mandate was no longer constitutional under Congress’s taxing power. The judge reasoned that because the individual mandate is “essential” to and cannot be severed from the rest of the ACA, the entire law is invalid. The case was then appealed to the 5th Circuit.

Neither the district court ruling nor the DOJ’s change in position has any immediate impact: The court decision was a declaratory judgment rather than an injunction to freeze the ACA. But the decision — and the DOJ’s new stance — raises questions about whether the Trump administration will continue enforcing the ACA. For now, however, the ACA remains the law of the land and employers should continue to fully comply.

The DOJ plans to file its brief with the 5th Circuit on April 24, 2019. If the 5th Circuit agrees with the district court and the DOJ, the case will likely be appealed to the Supreme Court, so any final resolution may be slow to arrive.