On March 4, 2015, the U.S. Supreme Court heard oral arguments in King v. Burwell, a case that centers on the meaning of statutory language in the Patient Protection and Affordable Care Act (PPACA). At question in the case is whether or not the Internal Revenue Service (IRS) may issue regulations to extend tax-credit subsidies to coverage purchased through health Exchanges established by the federal government via the Department of Health and Human Services (HHS) under Section 1321 of PPACA.
The ruling from the court is expected in late May or June of 2015. The case involves challenges to the IRS ruling that individuals are eligible for the premium subsidy regardless of whether their state has a state-run or federally-run Marketplace or Exchange. In King, a lower court held that the current IRS interpretation of Section 36B, which provides for premium tax credits to anyone who purchases insurance on any Exchange, is reasonable. Conversely, another court, in a case called Halbig v. Burwell, held that, based on the way the law is written, the subsidies should only be available to people living in a state with a state-run exchange. As we await the decision, employees will still receive premium subsidies and employers should continue preparations to meet the employer-shared responsibility/"play or pay" requirements.
For more information on this case, download UBA's free PPACA Advisor, "Supreme Court Hears Oral Argument in Subsidy Eligibility Battle".For upcoming analysis on this case by UBA Partners, subscribe to the UBA blog.