In a 2-1 vote, a three-judge panel for the U.S. Court of Appeals in Washington ruled today that subsidies may not be offered in the federal health exchange. The decision overturned a lower court ruling. The Court held that tax subsidies may not be provided in at least half of the states. Specifically, health exchanges run by the federal government in 34 states are not eligible for tax subsidies. The way the Patient Protection and Affordable Care Act is written makes clear that the subsidy is available only to people who bought plans on state-run exchanges.
The government could request an “en banc” hearing, putting the case before the entire appeals court, and the question ultimately may end up at the Supreme Court.
If subsidies for half the states are barred, it represents a potentially crippling blow to the health-care law, which relies on the subsidies to make insurance affordable for millions of low and middle-income Americans.
As always, AWANE is keeping a close eye on this potentially huge blow to President Barack Obama’s health care law. Stay tuned for updates.
For more information please contact AWANE at http://www.awane.com/contact-us/.
Phone: (800) 258-5318
PO Box 838
2-4 Main Street
Peterborough, NH 03458
Disclaimer: This document is designed to highlight various employee benefit matters of general interest to our readers. It is not intended to interpret laws, regulations or to address specific client situations. It should not be construed as legal advice or opinion.