This week, the U.S. Court of Appeals for the D.C. Circuit and the Fourth Circuits released opinions regarding the federally run health care exchanges under the ACA. Specifically, the cases explore subsidies provided to individuals purchasing health insurance in federal exchanges.
In both cases, the primary question was whether health care plans purchased through federally run health care exchanges were eligible for tax credits under the ACA. Twenty-seven states opted to not create their own exchanges, and nine created only partial exchanges. In answering this question, the Fourth Circuit in King v. Burwell found that the statutory language of 26 U.S.C. § 36(b) was ambiguous when read in the context of the statutes as a whole, and did not clearly express congressional intent. As such, the unanimous 3-0 King panel reasoned that “if Congress wanted to create a two-tiered exchange system, it would have done so expressly.” The Fourth Circuit then determined that the statutory interpretation chosen by the IRS was permissible.
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Topics: Affordable Care Act, Employee Benefits, Employer Mandates, Healthcare, IRS, Tax Credits
Published In: Civil Procedure Updates, Health Updates, Insurance Updates, Labor & Employment Updates, Tax Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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