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Admin March 4, 2015 1 min read

Subsidies under scrutiny: ACA yet again before the Supreme Court

This week brings a bit of déjà vu for all of us in the benefits industry, as once again, a challenge to the Affordable Care Act has reached the Supreme Court. Similar to the Court’s ruling on ACA’s individual mandate in 2012, the stakes in this year’s arguments are just as high.

At issue in the case (King v. Burwell), is the legality of ACA’s tax subsidies to Americans who are unable to access coverage affordably on their own and/or lack access to affordable coverage through their employer.

Of the more than 11 million total words in ACA, this week’s oral arguments in King v. Burwell center on just four: “established by the state.”

ACA explicitly states that Americans only are entitled to subsidies to purchase health coverage through insurance exchanges that are “established by the state.” Although many observers take the law to implicitly include federal exchanges operated in 36 states, the law doesn’t read as such. Following this week’s hearings, the Court is expected to rule this summer on whether to invalidate the subsidies for policy applicants in those 36 states.

We’re staying up to date on the latest from the chamber this week, thanks to our colleagues at Kaiser Health News and Workforce magazine. We plan to feature a detailed analysis of the ruling—including tips for employers on next steps—on our website this summer.