5th Circuit Says ACA Individual Mandate Is Unconstitutional

A panel of the U.S. Court of Appeals for the 5th Circuit ruled Dec. 18, in Texas v. United States, that the Affordable Care Act's (ACA's) individual coverage mandate, effectively repealed as of this year, is unconstitutional. But the appellate panel then sent the case back to the district court to adjudicate whether the individual mandate's removal leaves the rest of the law standing.

On Dec. 14, 2018, district court judge Reed O'Connor ruled that because Congress eliminated the penalty on individuals without ACA-compliant health coverage effective in 2019, the ACA's individual mandate requiring people to have health insurance "can no longer be sustained as an exercise of Congress's tax power." O'Connor, who sits in the Northern District of Texas, then struck down the ACA in full, concluding that the individual mandate is so connected to the law that Congress would not have passed the ACA without it. His ruling, however, left the ACA in place pending an appeal to the Fifth Circuit.

On appeal, the split panel of the Fifth Circuit instructed the district court to rehear the matter and to provide additional analysis on whether the rest of the law passes constitutional muster without the individual mandate.

Excerpt from SHRM article By Stephen Miller, CEBSDecember 19, 2019

Individual Mandate Ruled Unconstitutional

On June 6th, 2011 a federal appeals court in Cincinnati ruled that the Individual Mandate (the portion of the reform law that states all individuals must have health insurance) was constitutional.  This was the first appellate court to rule on the issue.  Well, on August 12, 2011 a second federal appeals court in Atlanta has ruled the Individual Mandate as unconstitutional.  When ruling, they stated that this provision, although unconstitutional, is "severable" from the rest of the legislation.  This means that the Individual Mandate would be eliminated but the rest of the law would remain. 

Since there are now two federal courts that have ruled on the issue and have split their decision, it makes it much more likely that this issue will be in front of the U.S. Supreme Court as early as the fall with a decision in 2012.