Employee Benefit Advisors has been following two court cases that have been falling under the radar. These cases could dismantle health care reform as we know it.
Excerpts from Employee Benefit News September 27, 2013 by Serena Yee and Christie Daly
The ACA requires the creation of a health insurance exchange in each state that will serve as a competitive marketplace where individuals and small businesses can purchase private health insurance. If a state refuses to establish an exchange then the federal government is taking over the implementation.
Section 1401 of the ACA provides that premium assistance is available to taxpayers who are enrolled in coverage through an exchange established by the state under Section 1311 of the ACA. Nonetheless, the Internal Revenue Service promulgated a regulation that bases eligibility for premium assistance subsidies on enrollment in coverage through any exchange, including a federally-established exchange. Specifically, the regulation states that subsidies shall be available to anyone “enrolled in one or more qualified health plans through an exchange,” and subsequently defines an exchange to mean “a state exchange, regional exchange, subsidiary exchange and federally-facilitated exchange.”
Since a majority of the states, 34 to be exact, have refused to establish a state exchange, a ruling in favor of the plaintiffs could seriously jeopardize the future of the ACA since the subsidies are key to the operation of other parts of the law, including the calculation and collection of the individual and employer mandate penalties.