One circuit court guts ACA, another revives it — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
  • LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

One circuit court guts ACA, another revives it

Get PDF file

by on
in Employment Law,Human Resources

At 11:00 a.m. on July 22, a three-judge panel of the District of Columbia Circuit Court of Appeals dealt a potentially lethal blow to the Affordable Care Act, ruling that health insurance premium subsidies on which the ACA’s individual mandate depends are illegal in states that don’t run their own insurance exchanges.

Two hours later, a panel of the 4th Circuit Court of Appeals reached exactly the opposite conclusion.

The conflicting decisions set up what could be the ACA’s biggest legal challenge since the Supreme Court affirmed the law’s constitutionality in 2012. Because two circuit courts disagree, the Supreme Court may have to resolve the split.

Within minutes of the D.C. Circuit panel’s ruling in Halbig v. Burwell, the Obama administration said it would request an en banc review by all 11 D.C. Circuit judges.

Both Halbig and King v. Burwell, the 4th Circuit case, addressed the same question: Are ACA premium subsidies legal nationwide, or just in states that have their own insurance exchanges? The statute says subsidies can go to those “enrolled through an Exchange established by the State.”

So far, 87% of the 5.4 million people buying coverage through the ACA qualify for subsidies.

Fourteen states run their own insurance exchanges, but 36 opted to have the federal government broker policies using the website. The lawsuits argued that policies bought through don’t qualify for subsidies.

Lower courts repeatedly have held that ACA language makes it clear that Congress intended to offer subsidies to qualified individuals regardless of where they live.

Despite the circuit court split, the cases may never make it to the Supreme Court. The liberal-leaning D.C. Circuit will likely uphold subsidies in an en banc review, aligning it with the 4th Circuit.

However, the Supreme Court could still decide to take up the subsidies question, especially since two similar cases continue to percolate through the legal system.

Leave a Comment

Previous post:

Next post: