EB Flash: States Seek Supreme Court Review of Individual Mandate

Employee Benefits Alert
01.06.2020

Twenty states and the District of Columbia are asking the Supreme Court to review a decision by the U.S. Court of Appeals for the Fifth Circuit that found that the Affordable Care Act's (ACA's) individual mandate is unconstitutional. When the Supreme Court upheld the ACA in 2012, its constitutionality hinged largely on the individual mandate, which imposed a financial penalty on individuals who did not purchase health insurance.

Congress reduced the penalty to zero in 2017, leading to a court challenge in the case of Texas v. United States, in which the U.S. District Court for the Northern District of Texas held that the ACA is unconstitutional. On December 18, 2019, the Fifth Circuit held that the lower court correctly found that the individual mandate was unconstitutional and sent the case back to the district court to decide whether the individual mandate is severable from the rest of the ACA. (See our prior alert on this ruling.) 

"[T]he lower courts' actions have created uncertainty about the future of the entire Affordable Care Act, and that uncertainty threatens adverse consequences for our Nation's healthcare system, including for patients, doctors, insurers, and state and local governments," according to the states' motion to expedite consideration of the petition filed on January 3, 2020.

The petition for certiorari presents the following questions for potential resolution:

  1. Whether the individual and state plaintiffs in this case have established standing to challenge the individual mandate.
  2. Whether reducing the penalty to zero rendered the individual mandate unconstitutional.
  3. If so, whether the individual mandate is severable from the rest of the ACA. 

The Supreme Court's current term runs through June. Most observers expect the Court will defer action on the petition and allow the case to make its way through the lower courts.

 The 41-page petition filed by the 20 states and the District of Columbia is posted here

 The 15-page motion to expedite consideration of the petition is posted here.

 The 101-page decision by the U.S. Court of Appeals for the Fifth Circuit remanding much of the case back to the District Court for the Northern District of Texas is posted here.