Employee Benefit Advisors blogged Oct 9, 2013 and July 7, 2014 about court cases that had been falling under the radar. EBA said “These cases could dismantle health care reform as we know it.”
Friday, Nov 7, 2014, the Supreme Court announced that they will take up the challenges to whether subsidies should be available to consumers in federally facilitated marketplace (FFM) states. The case argument is that the statute, which states that subsidies are only to be made available in exchanges “established by states,” prohibits consumers in FFM and partnership states from being able to access subsidies, as the federal government is overseeing any non-state-based exchange.
With the basis of both the employer and individual mandates on the line, and therefore, the primary enforcement mechanisms of the healthcare reform law, this case has significant potential to destabilize healthcare reform. A ruling by the Supreme Court striking down subsidies in federal exchanges could have far-reaching effects to the entire health reform structure. If consumers are unable to purchase affordable coverage without subsidies they would not be compelled by or subject to the individual mandate to purchase coverage, and if employees are unable to obtain subsidized coverage through the marketplace then employers would not be subjected to the employer mandate, as the employer mandate is only triggered when a large employer does not offer affordable coverage and an employee receives subsidized coverage, and therefore may drop coverage altogether in states using the federal exchange.
Humpty Dumpty sat on a wall,
Humpty Dumpty had a great fall;
All the King’s horses, and all the King’s men
Cannot put Humpty Dumpty together again.
Thanks to the National Association of Health Underwriters for providing the substance of the blog.