King v. Burwell Decision
The Supreme Court released their opinion on June 25, 2015 in which they rejected a challenge to the Affordable Care Act that would
have erased subsidies received by individuals within States where the State did not establish and run the Exchange. The 6-3 ruling by the Court was authored by Chief Justice John Roberts and was joined by Justices Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonya Sotomayor and Elana Kagen. The opinion cited that the Congressional intent of the legislation should be interpreted based on the context of the entire law, which was to improve health insurance markets. Chief Justice Roberts wrote: “The combination of no tax credits and an ineffective coverage requirement could well push a State’s individual insurance market into a death spiral. It is implausible that Congress meant the Act to operate in this manner.” Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. Section 36B can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt.
This means that Americans that have received subsidies through exchanges, whether State or Federally run, will continue to receive them.
What this means for the industry:
If the court had ruled the other way there could have been potential changes to the law via political posturing and legislative maneuvering. However, this outcome simply means that nothing changes from a compliance perspective. Individuals continue to receive subsidies, and employers still have the same obligations under the Employer Shared Responsibility Tax and IRS Reporting requirements.
The information that you have been providing to your customers and clients truly remains the same. Each day that they fail to act, they fall further away from full compliance. Let SyncStream help you or your clients keep in compliance with health care law by attending one of our FREE webinars demonstrating our ACA tools, the Dashboard and Reporting Essentials.