SCOTUS rules 6-3 in favor of Burwell

In the biggest legal threat to the Affordable Care Act (ACA) since it was ruled constitutional three years ago, the Supreme Court upheld a key provision of the law on Thursday by affirming that consumers in all states—not just those that established their own marketplaces—are eligible to receive (and can continue to receive) insurance subsidies that allow them to purchase healthcare plans. The King v. Burwell ruling marks the second major win for the administration before Court.

The plaintiffs in the case had argued that the ACA subsidies were only available to those who enrolled through a marketplace “established by the state,” which by their interpretation clearly excluded those on the federal platform (HealthCare.gov). According to the Dept. of Health & Human Services, an estimated 6.4 million Americans currently receive subsidies in the 34 states that don’t have their own state-based marketplaces.

In the 6-3 decision, authored by Chief Justice John Roberts, a majority of the justices opined that a ruling killing off the subsidies would have set the state markets into a death spiral, and that this could not have been Congress’ intent…

“The combination of no tax credits and an ineffective coverage requirement could well push a State’s individual insurance market into a death spiral. It is implausible that Congress meant the Act to operate in this manner. The argument that the phrase ‘established by the State’ would be superfluous if Congress meant to extend tax credits to both State and Federal Marketplaces is unpersuasive. Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”

The court’s four liberal justices (Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagen) joined the Roberts opinion, as did Justice Anthony Kennedy, who is often a swing vote on the court; conservative Justices Antonin Scalia, Clarence Thomas and Samuel Alito dissented.

Regardless of whether you agree with the Court or not, the public marketplaces make health insurance more accessible, more affordable and more attainable for many Americans. That being said, many employers continue to struggle with the health insurance options available to them, such as high deductible health plans or plans that increase the amount of cost sharing borne by employees. This trend is echoed on both the state-based and federally-facilitated marketplaces, where much of the coverage available has/does just that. Consequently, the importance of account-based, consumer-directed employee benefit arrangements—like those offered by TASC—is heightened in this ACA environment as employers take action to reduce the costs of their health coverage.

TASC believes that employee benefit plans (i.e. FSAs, HRAs & HSAs) are an important component of the current employer provided health system, and is dedicated to maintaining and expanding these products/service offerings, which in return encourages the efficient and effective use of tax-advantaged healthcare funds. This is consistent with TASC’s pro-Client/pro-Participant stance, and reflects our efforts to ensure customer footing at the forefront of the decision making processes.