Courts Disagree on ACA Exchanges, Subsidies and Employer Mandates

453626233In yesterday’s Staffing Stream, I discussed the decision in the Halbig v. Burwell case by the District of Columbia Circuit Court of Appeals. That decision threw out an IRS rule that interpreted the Affordable Care Act to permit health insurance subsidies and employer mandate penalties in states that have not established their own ACA insurance exchanges. The Halbig decision, if upheld, would immobilize key portions of the ACA and could prompt the complete practical disintegration of that law’s implementation.

Later yesterday, another federal appeals court, the Fourth Circuit Court of Appeals, handed down a decision that reached a completely opposite result from Halbig, upholding the IRS rule that Halbig had invalidated earlier in the day. The existence of this case, styled King v. Burwell, was mentioned in yesterday’s Staffing Stream article on Halbig.

These two cases are virtually identical in the way that the issues are framed, the lawyers arguing for each side, and the composition of the groups filing “friend of the court” briefs.  One difference in the opinions is that the Halbig court applied judicial principles to resolve the statute’s meaning, while the King court found the statutory language ambiguous and then deferred to IRS’s interpretation.

Both of these cases will be put through additional procedural steps, possibly including rehearings by the original three-judge panels, en banc hearings in front of a dozen or so judges of each circuit, or discretionary review by the United States Supreme Court.  Regardless of the paths that the cases take, the ultimate answer is likely to come from the Supreme Court.  It is highly unlikely that the issue could be resolved before the employer mandate is scheduled to take effect in January of 2015.

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George M. Reardon

George M. Reardon
George M. Reardon is an attorney whose practice is focused on the staffing industry. He can be reached at georgemreardon (at) aol (dot) com.

George M. Reardon

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