Q: I was trying to follow the case King v. Burwell, but it got away from me with everything else happening. What might the effect of the Supreme Court hearing this case have on the ACA, and more specifically our school?
A: First, let's begin with a brief summary. King v. Burwell is a case addressing which individuals are eligible for the federal subsidy on the federal exchange. It does not directly pertain to any other portion of the Affordable Care Act. The plaintiffs in this case argue that the law implicitly states that only individuals who purchase insurance on a state exchange are eligible for the tax subsidy—not through purchase through the federal exchange. The arguments are scheduled for March (so you haven't missed anything yet!), with the decision expected by the end of the court session in June.
Without trying to guess how the Supreme Court will rule on this case, I will lay out some considerations for you. (Again, the case does not involve any portion of the Affordable Care Act other than which individuals are eligible for a federal subsidy). As an employer, you should continue to follow the employer mandates as if the case were not pending. This includes offering health insurance that is of “minimum value and affordable” to employees who work 30 hours per week or more. You should also be preparing for the required reporting of eligible individuals including those participating in your health insurance plan on a month-by-month basis.
If the court rules in favor of the plaintiffs, it means that individuals on the federal exchange will no longer be eligible for the subsidy. Then it will be up to each individual state and/or Congress to act. For the individual states, this means they will have to decide whether they will sponsor an exchange so that constituents have access to affordable health insurance or let their constituents forgo health insurance—at least through the state exchange. Congressional action would require an amendment to the wording.
For you, the employer, it would change whether you pay a penalty for not offering health insurance. The penalty arises if your full-time employees and their dependents are not offered health insurance or you offer health insurance that is not affordable or does not have minimum value. If your employees go to the federal exchange for coverage, there would be no penalty (now) because there would be no premium tax credit. On the other hand, if your employee goes to a state-based exchange, you would still have the penalty if he/she qualifies for a tax credit.
If the court rules against the plaintiffs, the law remains as is. If you were counting on this portion of the law being overturned and haven't been preparing employer mandates as if the case isn't pending, you may be faced with a penalty.
The debate over the collapse of health care reform if the court rules with the plaintiffs continues and will be left to the pundits.
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