Supreme Court’s Long-Awaited Decision on Affordable Care Act Means Business as Usual for Employers
On June 25th, 2015, the United States Supreme Court handed down its long-awaited opinion in the case of King v. Burwell, ruling that the individual tax credits provided for under the Affordable Care Act (“ACA”) to assist individuals in obtaining affordable health coverage on an exchange will continue to be available for qualifying individuals who purchased coverage on an exchange, regardless of whether the exchange is established by a state or the federal government. While an adverse decision by the Supreme Court could have undercut the IRS’s enforceability mechanism under the employer mandate in states with a federally-run exchange, this decision affirmed the IRS’s ability to levy penalties on employers who do not adequately comply with the ACA’s employer shared responsibility provisions.
Important for employers is the fact that the Supreme Court’s decision will not result in any changes with respect to their compliance obligations under the ACA. Instead, employers must continue with their compliance efforts, especially with respect any obligation they have to offer minimum essential coverage that is affordable and provides minimum value to its “full-time employees”, as that term is defined under the ACA, and to make an annual reporting of such offers of coverage.
Karson Kampfe, Summer Associate