In a much-anticipated June 25 ruling on the Affordable Care Act (ACA),
the U.S. Supreme Court declared that health-insurance subsidies are available
to Americans in two thirds of the states.
Although the ruling was critical to the future of the healthcare law, it
doesn't change much for employers. In fact, nothing relative to employers'
ACA obligations has changed. The ruling does mean tax credits remain available
to individuals in states using a federal exchange and not solely to individuals
in states that have established a state exchange.
The Court ruled 6-3 in
King v. Burwell that federal tax credits to subsidize healthcare coverage are authorized
under the ACA. Opponents of the law argued that it doesn't authorize
subsidies to individuals in states that don't offer a state-run healthcare
exchange. Thirty-four states have not set up exchanges, so individuals
in those states turn to a federal government exchange.
Roberts wrote that "Section 36B of the ACA allows tax credits for
insurance purchased on any Exchange created under the Act." He went
on to say that the tax credits "are necessary for the Federal Exchanges
to function like their State Exchange counterparts, and to avoid the type
of calamitous result that Congress plainly meant to avoid."
"Congress passed the [ACA] to improve health insurance markets, not
to destroy them," Roberts wrote. "If at all possible, we must
interpret the Act in a way that is consistent with the former, and avoids
Carolyn Lloyd Coward is a principal with The Van Winkle Law Firm, where she focuses her practice on
health care and
employment law. Carolyn helps businesses of all sizes navigate the Affordable Care Act
and its impact on employers.