The U.S. Supreme Court has agreed to hear King v. Burwell, (No. 14-114, 2014), which is an appeal from the 4th Circuit regarding whether the Affordable Care Act’s (ACA) premium tax credits are available to all eligible individuals, regardless of whether they purchase health insurance through a state or federal exchange.
ACA says: One section limits tax credits to individuals who buy insurance through state exchanges; another section isn’t quite that specific. The Supreme Court will issue its decision by the end of June.
THE TAKEAWAY: The Court’s decision could have a profound impact on the continued implementation of the ACA. Reason: The employer free-rider penalties depend on whether even one full-time employee who buys coverage on the individual exchange receives a tax credit. Until the Court issues a decision, however, you should continue to implement the ACA and continue to distribute exchange notices to new hires.