Supreme Court ruling on government subsidies and federal tax credits

June 26, 2015
Posted in ACA 101
June 26, 2015 LI Advantage

Supreme Court ruling on government subsidies and federal tax credits

There was question as to the legality of the government subsidies or federal tax credits given to those eligible participants who purchased coverage through the federal exchange/marketplace for health insurance. This is because the way the Affordable Care Act was written, only state run exchanges were allowed to grant subsidies to eligible participants who enrolled in coverage through the exchange that is run by that state. On June 25, 2015, the U.S. Supreme Court upheld that eligible participants who enroll in health coverage through a state or federally run exchange are legally permitted to receive subsidies regardless of whether the exchange they purchased coverage from was a state run exchange or the federal exchange. This does not change any employer obligation under the ACA. It is business as usual.

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