The Affordable Care Act – On the Way Back to the Supreme Court?

Posted by Donna Craig in Jul, 2014

On July 22, 2014, two U.S. Court of Appeals reached opposite conclusions involving federal tax credits available to the individuals under the Affordable Care Act (“ACA”).  The ACA allows for federal tax credits to low and middle-income Americans to offset their costs of purchasing insurance policies through Insurance Exchanges.

In the Halbig v Burwell case the Court of Appeals for the District of Columbia concluded that federal tax credits are only available in states that operate their own Insurance Exchanges (“State Exchanges”).  For 34 states where Insurance Exchanges are either operated by the federal government or jointly operated by the state and federal government (Michigan), individuals would not be able to receive these tax credits based on the Halbig case.

On the same day the Fourth District Court of Appeals ruled in the King v. Burwell case that the Internal Revenue Service may grant tax credits to individuals who purchase health insurance on both state Insurance Exchanges and Insurance Exchanges operated by the federal government.  Because of these opposite rulings, the issue of tax credits for individuals most likely will be on its way back to the U.S. Supreme Court.

 Confused on how to interpret the Affordable Care Act?  The Health Law Center is available to answer your questions.