A federal appeals court ruled on Wednesday that payments individuals owe to the Internal Revenue Service for failing to obtain health insurance under the Affordable Care Act should be given priority in bankruptcy, Reuters reported. The U.S. Court of Appeals for the Third Circuit affirmed a lower court's ruling that payments owed to the IRS are entitled to be paid off before other debts in a Chapter 13 bankruptcy because they qualify as taxes. The decision came in the case of a Pennsylvania couple who filed for bankruptcy in 2019 owing $927 to the IRS for failing to obtain health insurance as required by the ACA. The individual mandate of the landmark healthcare law had required Americans to obtain health insurance or make a so-called "shared responsibility payment," but that requirement was eliminated for individuals in late 2018. Wednesday's decision was the first precedential opinion on the issue from an appeals court, but mirrors findings from a similar ruling from the Bankruptcy Appellate Panel of the 6th Circuit in March.
