U.S. Supreme Court Upholds Affordable Care Act…Again

In a 6-3 decision, the Supreme Court sided with the Obama administration and held that individuals who receive health insurance through the federal government’s exchange are still eligible for tax subsidies to help pay for the insurance.  While the law remains controversial, the decision removed the final major judicial challenge to the Affordable Care Act (“ACA”).

In King v. Burwell, opponents of the ACA argued that the wording of the ACA meant only plans purchased through state exchanges were eligible for subsidies.  Specifically, it was argued that the part of the ACA which states that insurance would be available through an exchange “established by the state” meant that only residents of states that established their own exchanges are eligible for subsidies.  Chief Justice Roberts, writing for the majority stated, “[t]he whole point of that provision is to create a federal fallback in case a State chooses not to establish its own Exchange. Contrary to petitioners’ argument, Congress did not believe it was offering States a deal they would not refuse—it expressly addressed what would happen if a State did refuse the deal….We have held that Congress ‘does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions.’ [Internal citations omitted].  But in petitioners’ view, Congress made the viability of the entire Affordable Care Act turn on the ultimate ancillary provision: a sub-sub-sub section of the Tax Code. We doubt that is what Congress meant to do. Had Congress meant to limit tax credits to State Exchanges, it likely would have done so in the definition of ‘applicable taxpayer’ or in some other prominent manner. It would not have used such a winding path of connect-the-dots provisions about the amount of the credit.”

Chief Justice Roberts summed up the majority opinion by stating, “[c]ongress passed the Affordable Care Act to improve health insurance markets, not to destroy them.”

With the successful defense of the ACA in 2012, where the Supreme Court held that the individual mandate was constitutional and now this decision, absent a repeal of the law, the ACA appears to be here to stay and Employers should take the necessary steps to ensure that they are in compliance.

For more information on the ACA or other human resource needs please contact Clemans Nelson at (800)-282-0787 or at one of the following regional offices: