U.S. Supreme Court Rules in King v. Burwell – Subsidies Available in All States

June 25, 2015

The United States Supreme Court just held in the King v. Burwell case that taxpayers in states which have not established their own exchange are still entitled to the premium assistance subsidies.  The challengers in the Burwell case had argued that the language in the Affordable Care Act which authorized subsidies was limited to states which had established their own exchange, and not available to taxpayers in states which had adopted the federal exchange, as Wisconsin had done.  In a 6-3 decision, the Court found that while the argument that the plain meaning of the statute would seem to result in the opposite finding, “[t]he Affordable Care Act contains more than a few examples of inartful drafting” and “[i]n this instance, the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.” 

So, the chaos which would have resulted from the Court’s rejection of subsidies for states using the federal exchange has been avoided.  Wisconsin taxpayers can keep their subsidies, and Wisconsin employers have lost an opportunity to avoid shared responsibility penalties in their entirety (if subsidies for Wisconsin employees had been eliminated).

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