Wednesday, April 1, 2015

ACA FAQ of the Month: What is King v. Burwell about, and how will it affect my business?

April 2015
By: Peter E. Hansen, Esq.

The United States Supreme Court recently heard oral argument in King v. Burwell, the latest case to attack the ACA. In brief summary, King addresses whether individuals who purchased coverage through the federally-run health exchanges may continue to receive premium assistance subsidies, given that the ACA explicitly limits premium assistance to those who purchase coverage “through an Exchange established by the State.” 26 USC § 36B(b)(2)(A). If not, then the federal exchanges – which currently operate in 34 states – can no longer award premium tax credits, and therefore become functionally useless.
There are essentially two possible outcomes here:  (1) the Supreme Court finds in favor of the Government, and the ACA continues in full force; or (2) the Supreme Court finds in favor of the challengers, healthcare.gov eventually stops functioning in 34 states, and the ACA becomes dysfunctional. For whatever it’s worth, various news outlets reported that the so-called “liberal” and “conservative” Justices stayed true to form, suggesting that the case will come down to the votes of two Justices – Kennedy and Roberts. Kennedy is typically considered to be the “swing” vote, but it was Roberts who cast the deciding vote to uphold the ACA’s individual mandate in National Federation of Independent Business v. Sebelius.
So where does that leave you and your company? King may be the most serious challenge that the ACA has faced to this point, and the decision will impact millions of people … but we do not yet know how. It goes without saying, then, that employers should not ignore the ACA under the assumption that the Supreme Court will strike it down. After all, many people (myself included) believed that the Supreme Court would find the individual mandate unconstitutional in Sebelius, and we all know how that turned out. We will likely receive a decision in June or July of this year, so stay tuned.

Questions? Suggestion for a future ACA FAQ of the Month? Please contact WS Attorney Peter E. Hansen at (262) 560-9696, or email pehansen@wesselssherman.com.