On Thursday morning the Supreme Court ruled in a 6-3 decision that subsidies provided to individuals through a Federal exchange would stand. This is a win for the Obama administration who felt that the case never should have made it to this point. Earlier this month after the G7 Summit in Krun, Germany the President stated the following:
"And so this should be an easy case. Frankly, it probably shouldn’t even have been taken up. And since we’re going to get a ruling pretty quick, I think it’s important for us to go ahead and assume that the Supreme Court is going to do what most legal scholars who’ve looked at this would expect them to do."
This morning the president got his wish, with only the most conservative members of the court - Justices Scalia, Thomas and Alito - dissenting from the majority ruling. Chief Justice Roberts penned the majority opinion which can be accessed by clicking here.
In the opinion the Chief Justice acknowledges that the wording is ambiguous, however states:
"the statutory scheme compels us to reject petitioners' interpretation because it would destabilize the individual insurance market in any state with a federal exchange, and likely create the very 'death spirals' that Congress designed the act to avoid,"
In his dissenting opinion Justice Scalia made his position quite clear:
"Under all the usual rules of interpretation... the government should lose this case," Scalia writes. "But normal rules of interpretation seem always to yield to the overriding principle of the present court: The Affordable Care Act must be saved."
So now, after the years of drama and waiting there will be no change to the structure and administration of the ACA subsidies. This is good news to the nearly 6.4 million Americans that are currently receiving subsidies in the 34 exchanges being administered by the Federal government. The Kaiser Family Foundation estimates that there were $1,737,476,989 of monthly subsidy dollars at risk.
From an employer perspective it will continue to be business as usual. PCORI fees and Transitional Reinsurance fees will be due later this year and the new reporting requirements under sections 6055 & 6056 of the law have companies scrambling to find a solution to comply in the first quarter of 2016.
With the ruling now in the rear view mirror, the republican congress will likely now attempt to challenge specific aspects of the law, such as the medical device excise tax, 30-hour threshold for full-time employees and the Cadillac tax to name a few.
Greg Stancil is the Director of Healthcare Reform for Scott Insurance
The House of Representatives is expected to vote later this week on newly introduced legislation to ease the health care reform law’s definition of a full-time employee by changing it to those working an average of at least 40 hours per week, shielding more employers from a stiff financial penalty imposed by the law.
Under the Patient Protection and Affordable Care Act, employers with at least 100 employees are required, effective in 2015, to offer qualified coverage to full-time employees — defined as those working an average of 30 hours per week — or be liable for an annual $2,000 penalty per employee. The same requirement applies, effective in 2016, to employers with between 50 and 99 employees.
The measure, H.R. 30, introduced Tuesday by Rep. Todd Young, R-Ind., with 147 co-sponsors, would change the act’s definition of full-time employees to those working an average of 40 hours per week.
“Repealing this provision and restoring the traditional understanding of a 40-hour (workweek) is necessary to protect” the paychecks of employees, Rep. Young said in a statement.
The Obama administration strongly opposes the measure, and a presidential veto is likely if the measure receives final congressional approval.
“The issue is essentially that we would be putting even more workers in a situation where we could see some employers cutting back on their hours to try to avoid the requirement of providing them quality health insurance,” White House Press Secretary Josh Earnest said Tuesday at a briefing.
The House last year approved an identical measure, but the bill died in the Senate, controlled by Democrats at the time, when then-Majority Leader Harry Reid, D-Nev., declined to bring up the bill.
A companion bill is expected to be introduced — perhaps as soon as Wednesday — in the Senate.