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Constitutionality of the Affordable Care Act (Texas v. Azar)

Latest Developments From the December 14 Decision

Last month, a federal judge in the Texas US district court issued a declaratory judgement that the Affordable Care Act (ACA), in its entirety, was unconstitutional. Judge O’Connor did not issue a “final” judgement that could be immediately appealed to the Fifth Circuit. He did not issue a preliminary injunction, which would have halted enforcement of the ACA but rather issued a declaratory judgement, which does not provide enforcement and is the court’s authoritative opinion.

Given the significance of this opinion in relation to the ACA, the intervenor-defendant states, led by California, asked Judge O’Connor to clarify his order that the ACA’s rights and obligations remain fully in effect, to stay his December 14 decision pending appeal, and to issue a partial final judgment, allowing for a prompt appeal to the Fifth Circuit. Upon request from Judge O’Connor, all parties agreed that Judge O’Connor should allow for an appeal.

On December 30, 2018, Judge O’Connor granted the intervenor states’ request for final judgement based on the December 14 order and a stay of that judgment. This allows for the intervenor states to immediately appeal and confirms that the ACA remains fully in effect nationwide while the case is on appeal. On January 3, 2019, the intervenor states asked the Fifth Circuit to review Judge O’Connor’s order. Following, the Department of Justice (DOJ) filed a motion stating it would appeal the decision. Previously, the DOJ stated it agrees that the individual mandate is unconstitutional but disagrees from the decision that it cannot be severed from the rest of the ACA. Additionally, the US House of Representatives plans to vote on joining the intervenor states in defending the case.

So what happens next? Initially, the Fifth Circuit will have to issue a briefing schedule, which will lay out the timeline for written arguments and likely oral arguments. Appeals are normally decided by randomly assigned three-judge panels. After submission of briefs or after oral argument, the appellate panel will issue a decision.

From there, a few options are available:

  • The judges send the case back to the trial court for additional proceedings;

  • The court determines on its own the matter should be reheard;

  • A party seeks a rehearing before the appellate panel; a party seeks review before the full appeals court (referred to as en banc); or

  • A party seeks review in the US Supreme Court. This can be a long process that will likely take us into 2020 for a final decision.

As we watch this pan out in the courts, it is important to remember the ACA is the law of the land and remains fully in effect nationwide. Employers will still need to comply with the ACA provisions and regulations.

Visit OneDigital’s ACA Watch Page for more information and we will continue to bring you updates as new developments transpire.

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