ML BeneBits


Longtime observers of the twists and turns of the Affordable Care Act (ACA) have seen this before—namely, yet another dramatic chapter in the almost 10-year journey of the ACA.

The latest chapter began last week when a Texas district court determined that the ACA is unconstitutional because the individual mandate—starting January 1, 2019—no longer triggers a tax for a violation of the mandate.

The Texas v. Azar opinion was not paired with an injunction halting enforcement of the ACA, so, for now, the ACA remains applicable across the United States (which was reinforced by statements by the administration this week that it will continue to administer and enforce the ACA).

So, given this latest chapter, how should employers approach the design and operation of their health plans?

Quite simply—for now—the best approach is “steady as she goes.” This is likely somewhat of a relief, given that the 2019 open enrollment process is over and employees are mere days away from receiving new enrollment cards.

But, it is possible that the Texas case could make it to and be upheld by the US Supreme Court by the end of the current term (expected to be June 2019). If this occurs, planning for the 2020 design of employer health plans could be thrown into disarray, so employers should continue to monitor the ACA and be prepared to potentially make difficult and quick choices regarding their health plan design early next summer.

If you have questions about how the Texas decision may impact your employer-sponsored health plans, please reach out to the authors or your Morgan Lewis contacts.