In a 6-3 decision announced Thursday morning, the U.S. Supreme Court ruled that the Affordable Care Act can continue to provide tax subsidies to eligible individuals who purchase insurance on either a federal or state exchange. In essence, this ruling maintains the status quo – that federal health care subsidies under the Affordable Care act are legal in all states, not just those with their own state-run insurance exchanges.
In this case, opponents sought to challenge the Affordable Care Act by pointing to language in the bill that allowed the tax subsidies for individuals enrolled on an “exchange established by the state,” arguing that the 34 states that defaulted to the federal exchange – healthcare.gov – were not eligible. In rejecting the latest challenge to the Affordable Care Act, Chief Justice Roberts, writing for the majority, stated, “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the act in a way that is consistent with the former, and avoids the latter.” Justice Scalia authored the dissenting opinion and was joined by Justices Thomas and Alito.
For businesses, the important takeaway is that there are no fundamental changes to the law. Regardless, compliance with the Affordable Care Act remains an important and complex issue for businesses of all sizes throughout the country.
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