Supreme Court upholds Obamacare again … but why?

Once again the Supreme Court has ruled in favor of the Affordable Care Act (ACA) — and upheld a component that’s become an essential part of the law. So now HR pros can start worrying about the upcoming Obamacare compliance challenges without any major distractions.

The Supreme Court case, King v. Burwell, is an appeal of a July ruling from the 4th Circuit Court of Appeals, which upheld the law’s subsidies.

Had the subsidies been struck down by the High Court, millions of Americans could’ve lost the tax subsidies that allowed them purchase affordable coverage under the health reform law.

In fact,  USA TODAY reported that more than 5 million Americans would be affected if the subsidies are struck down.

How affected? Those subsidies have reduced monthly insurance premiums by 76% (the average monthly premium dropped from $346 to just $82) for those who qualify, according to federal officials.

How we got here

As HR Morning has reported previously, the entire case essentially hinged on one phrase in the health reform law, which says that subsidies — in the form of tax credits — would be offered in health insurance exchanges “established by the state.”

But more than 30 states passed on setting up their own exchanges, so the feds stepped in to do so.

Four Virginia residents — the original plaintiffs in the case — claim that the subsidies are illegal in the states where only federal exchanges have been established.

‘Inartful drafting’

With its ruling, the Supreme Court essentially said that the subsidies should be available to all eligible Americans regardless of whether they live in states that have set up their own health insurance exchanges.

In the ruling, Chief Justice John G. Roberts, Jr. did acknowledge that the specific language in the Affordable Care Act was confusing and problematic. As Roberts put it, the law:

“contains more than a few examples of inartful drafting … Congress wrote key parts of the act behind closed doors, rather than through the traditional legislative process.”

Despite the language, Roberts said the intent of law was clear and that:

“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.”

Maintains status quo

So where does this leave employers. According to Buck Consultants global practice leader Tami Simon:

“The ruling will not have a significant impact on employers and the human resources department. It maintains the status quo for time being.”

And for employers, the status quo is finding ways to comply with the many complex Obamacare regs, such as:

• The reporting requirement (2016), and
• The Cadillac Tax (2018).