Supreme Court Verdict: Subsidies Through Federal Exchanges Will Stand

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

IRS releases draft of 2015 forms for 6055-6056 reporting

Fortunately for employers and vendors who have already started gathering data for the 2015 reporting there are very few changes to the forms.

The main forms that will be utilized by employers are the 1094-C and 1095-C forms. The 1094-C is unchanged and the 1095-C just has one additional voluntary field.  

A link to the forms is provided below:

Form 1094-B,Transmittal of Health Coverage Information Return:  http://www.irs.gov/pub/irs-dft/f1094b--dft.pdf 

Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Return: http://www.irs.gov/pub/irs-dft/f1094c--dft.pdf

Form 1095-A, Health Insurance Marketplace Statement: http://www.irs.gov/pub/irs-dft/f1095a--dft.pdf

Form 1095-B, Health Coverage: http://www.irs.gov/pub/irs-dft/f1095b--dft.pdf

 Form 1095-C, Employer Provided Health Insurance Offer and Coverage:

 http://www.irs.gov/pub/irs-dft/f1095c--dft.pdf