Thus, the Court held that “it is plain that the city's actions have burdened CSS's religious exercise by putting it to the choice of curtailing its mission or approving relationships inconsistent with its beliefs.” Because the Court found that the City violated the Free Exercise Clause of the First Amendment, it did not rule on the agency’s Free Speech claim.In California v. Texas, the Supreme Court upheld the penalty provisions of the Affordable Care Act (“the Act”), holding that Texas, seventeen other state plaintiffs and two individuals did not have standing to challenge the constitutionality of 26 U. S. C. §5000A(a)), the part of the Act that nullified the monetary penalty for failing to obtain minimum essential health insurance coverage.In 2010, the Act required many Americans to obtain minimum essential health insurance coverage and imposed a monetary penalty on most individuals who failed to do so.

A TORTUOUS PATHThe litigation was originally filed in February 2018 by the State of Texas and 20 other Republican-led states seeking to invalidate the entirety of the ACA. They allege that Congress effectively invalidated the ACA when it zeroed out the individual mandate penalty by reducing the “shared responsibility payment” to $0 as part of the 2017 Tax Cuts and Jobs Act (TCJA), 26 U.S.C. § 5000A(c). The original penalty contained in § 5000A(c) was $695/adult or 2.5% of household yearly income, whichever was less.

This morning, the Supreme Court of the United States granted certiorari in the following cases:California v. Texas, No. 19-840; Texas v. California, No. 19-1019: A petition for a writ of certiorari and conditional cross-petition were brought with respect to the Fifth Circuit’s decision that the Patient Protection and Affordable Care Act’s (“ACA”) minimum coverage provision, 26 U.S.C. §5000A, was unconstitutional. The petition raises the following three questions: 1) Whether the individual and state plaintiffs in this case have established Article III standing to challenge the minimum coverage provision in Section 5000A(a).

Applying a tax label to the penalty was also a strained analogy in that the law does not provide for the same enforcement mechanisms that the Internal Revenue Service (“IRS”) usually wields to collect taxes. (See26 U.S.C § 5000A(g)(2)).Financial Implications of the PPACA However, the crux of Sebelius is that the law will remain in effect barring legislative change.

[1](a) Requirement to maintain minimum essential coverage.—An applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month.26 U.S.C. § 5000A(a).[2](b) Shared responsibility payment.

However, doing so puts an additional cost burden on the employer. It will be interesting to see the effects of this change.A Word About Repeal of the ACA Individual Mandate The TCJA has also eliminated the “individual mandate” provision of the Affordable Care Act by reducing the amount of the “individual shared responsibility” penalty tax imposed under IRC Section 5000A to zero, effective as of January1, 2019. (It still applies for 2018.)

Individual Mandate Upheld Under the Taxing Clause The individual mandate requires most Americans to maintain a certain level of health insurance coverage. 26 U.S.C. § 5000A. Beginning in 2014, those who do not comply with the mandate must pay a “penalty” to the IRS with their taxes.

In particular, we examine how the Court may address whether the ACA’s individual mandate is severable from the rest of the statute and whether the remaining portions of the ACA may survive even in the event the individual mandate is struck down.The Supreme Court and the Individual MandateIn 2012, the Supreme Court in National Federation of Independent Business (“NFIB”)v. Sebelius, upheld a challenge to the constitutionality of the ACA’s individual mandate, 26 U.S.C. § 5000A. 567 U.S. 519 (2012).

Critics of the penalty argued that it was not large enough to influence the purchase of insurance, and since its passage in 2010, the ACA insurance reforms have been slowly eroded.Two major Supreme Court decisions have modified the practical application of the ACA, and since that time Congress has acted to amend the ACA. Texas v. Azar emanates from the 2017 Tax Cuts and Jobs Act (TCJA), which gutted the “shared responsibility payment” component of the ACA, reducing its amount to $0, effective January 2019 (26 USC § 5000A(c)). Two months after the passage of the TCJA, the plaintiff states and two individuals filed Texas v. Azar, in which the plaintiffs argued that the individual mandate was effectively nullified when the companion provision in the statute was reduced to $0. Once nullified, the plaintiffs argued that the shared responsibility payment failed to take the form of a tax.

In addition, 45 CFR 155.1308(f)(3)(iii) requires the state to describe the reason for the waiver request. The application does not include a description of the reason that the state is seeking to waive IRC §5000A(a). For this reason and those described above, the Departments determined that the application is not complete.