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Supreme Court Rejects Challenge to the ACA’s Individual Mandate

On June 17, 2021, the U.S. Supreme Court rejected the lawsuit filed by 18 states challenging the constitutionality of the Affordable Care Act’s (ACA) individual mandate in a 7-2 ruling. According to the Court, the plaintiffs did not have a legal right to sue as they had not suffered any injury due to the elimination of the individual mandate. As a result, the ACA as it exists today will remain in place. The Court did not actually rule on the individual mandate’s constitutionality but rather focused on the states’ objection to the elimination of the individual mandate penalty for not having health care coverage. The penalty was reduced to zero with the 2017 tax cut package under President Trump. At this time, there is no impact to employer-sponsored health care plans, but plan sponsors should continue to monitor the situation.

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