The Battle Update: What is going on with the ACA?

from Don't HR Alone · host Rhamy Alejeal

Good morning, Ladies and Gentlemen. Welcome to the People Processes podcast, where we dive deep into the tools, laws and yes processes that you need to know in order to scale and grow your organization. My name is Rhamy Alejeal, I'm the CEO of People Processes and I'm excited to have you here.We help organizations all across the United States streamline, optimize, implement, and revolutionize their HR operations. We've helped hundreds of companies and thousands of HR leaders across the world get their people processes right. Today we're doing a little update on what the heck is going on with the Affordable Care Act. Things are changing. Before we go, I want to take a quick second to ask you to please subscribe to our podcast. It makes a huge difference. You can find us on iTunes, Google podcasts, Spotify, Stitcher, any podcast or you like. You can also subscribe on peopleprocesses.com which gives you some subscriber-only content exclusive updates. We really appreciate that.So let's dive into this battle over the Affordable Care Act. The fate of the 2010 Affordable Care Act, also known as "Obamacare", including the many provisions affecting employers, such as the employer Mandate to provide health coverage - remains in limbo. A three-judge panel of the Fifth Circuit Court of Appeals has upheld a 2018 district court decision that the law's individual responsibility provision, the individual mandate, requiring individuals to maintain health coverage violates the U S Constitution. However, unlike the lower court, the Fifth Court did not automatically stripe down the remainder of the law. In a 2012 decision, the U S Supreme Court held that the ACA’s individual mandate was a constitutional exercise of Congress's power to levy and collect taxes. This was a big deal. It was huge news. It's a National Foundation of Independent Businesses versus Sabellius. If you ever want to look up the case exactly.I have a link on our website, peopleprocesses.com. However, the 2017 Tax Cuts and Jobs Act, the Trump Tax Plan from 2017, effectively eliminated the individual mandate. It reduced the penalty for failure to maintain health coverage to zero beginning in 2019. That made a huge difference because now based on that change, Texas district court concluded that the individual mandate is no longer part of a tax. It no longer represents an exercise of Congress's taxing powers and is therefore unconstitutional. Remember, it was only approved under their ability to tax. The court held that the individual mandate is “essential to” and “inseverable” from the other provisions of the ACA rendering those provisions unconstitutional as well. The district court did not issue an injunction barring enforcement of the ACA. Instead, they stayed its ruling pending a decision by an appeal of the Fiscal Fifth Circuit Court.So this is important to understand. The court found that the law is not going to work, but they didn't issue an injunction. So that means that if you are an employer, it's February, you need to do your 1095s, 1094s. The ACA mandate is still in effect. It went up to the Fifth Circuit Court and in their new decision, they agreed that the individual mandate is unconstitutional because “it can no longer be read as a tax and there is no other constitutional provision that justifies this exercise of congressional power.” However, the Appeals Court did not accept the district court's decision. That the demise of that one part of the law of the individual mandate rendered the entire law invalid. Instead, the Appeals Court sent the case back to the district court to “explain with precision” how the remaining...

What this episode covers

Good morning, Ladies and Gentlemen. Welcome to the People Processes podcast, where we dive deep into the tools, laws and yes processes that you need to know in order to scale and grow your organization. My name is Rhamy Alejeal, I'm the CEO of People Processes and I'm excited to have you here. We help organizations all across the United States streamline, optimize, implement, and revolutionize their HR operations. We've helped hundreds of companies and thousands of HR leaders across the world get their people processes right. Today we're doing a little update on what the heck is going on with the Affordable Care Act. Things are changing. Before we go, I want to take a quick second to ask you to please subscribe to our podcast. It makes a huge difference. You can find us on iTunes, Google podcasts, Spotify, Stitcher, any podcast or you like. You can also subscribe on peopleprocesses.com which gives you some subscriber-only content exclusive updates. We really appreciate that. So let's dive into this battle over the Affordable Care Act. The fate of the 2010 Affordable Care Act, also known as "Obamacare", including the many provisions affecting employers, such as the employer Mandate to provide health coverage - remains in limbo. A three-judge panel of the Fifth Circuit Court of Appeals has upheld a 2018 district court decision that the law's individual responsibility provision, the individual mandate, requiring individuals to maintain health coverage violates the U S Constitution. However, unlike the lower court, the Fifth Court did not automatically stripe down the remainder of the law. In a 2012 decision, the U S Supreme Court held that the ACA’s individual mandate was a constitutional exercise of Congress's power to levy and collect taxes. This was a big deal. It was huge news. It's a National Foundation of Independent Businesses versus Sabellius. If you ever want to look up the case exactly.I have a link on our website, peopleprocesses.com. However, the 2017 Tax Cuts and Jobs Act, the Trump Tax Plan from 2017, effectively eliminated the individual mandate. It reduced the penalty for failure to maintain health coverage to zero beginning in 2019. That made a huge difference because now based on that change, Texas district court concluded that the individual mandate is no longer part of a tax. It no longer represents an exercise of Congress's taxing powers and is therefore unconstitutional. Remember, it was only approved under their ability to tax. The court held that the individual mandate is “essential to” and “inseverable” from the other provisions of the ACA rendering those provisions unconstitutional as well. The district court did not issue an injunction barring enforcement of the ACA. Instead, they stayed its ruling pending a decision by an appeal of the Fiscal Fifth Circuit Court. So this is important to understand. The court found that the law is not going to work, but they didn't issue an injunction. So that means that if you are an employer, it's February, you need to do your 1095s, 1094s. The ACA mandate is still in effect. It went up to the Fifth Circuit Court and in their new decision, they agreed that the individual mandate is unconstitutional because “it can no longer be read as a tax and there is no other constitutional provision that justifies this exercise of congressional power.” However, the Appeals Court did not accept the district court's decision. That the demise of that one part of the law of the individual mandate rendered the entire law invalid. Instead, the Appeals Court sent the case back to the district court to “explain with precision” how the remaining provisions of the ACA “rise or fall on the constitutionality of the individual mandate.” “It may still be”, said the court, “that none of the ACA is severable from the individual mandate even after this inquiry is concluded. It may be that all of the ACA is severable from the individual mandate. It may also be that some of...