On June 25, 2015, the U.S. Supreme Court (the Court) ruled in favor of the federal government in King v. Burwell, regarding whether the Affordable Care Act (ACA) permits the Internal Revenue Service (IRS) to provide tax credits for individuals in states that have not established a state run health insurance exchange. The Court ruled that “Federal tax credits” through a federal exchange (also referred to as the Health Insurance Marketplace…Healthcare.gov) will continue to be available for health insurance in states that do not have a State Run Marketplace. As a result of this ruling, individuals who are receiving subsidies will continue to qualify regardless of whether they obtain coverage on a state or federal Exchange. Currently only sixteen states and the District of Columbia have established state run exchanges.
In general, subsidies are not available for employees who are eligible for employer sponsored coverage, if the coverage offered meets minimum value and affordability standards. However, the individual mandate portion of the law, that requires most all employees to maintain credible coverage or face a fine, remains intact. Employer fines related to the Employer Shared Responsibility portion of the law still apply, and will presumably be enforced this year and beyond. Employers that offer qualified credible coverage to all of their eligible employees will be unaffected by the ruling. Employers who do not, will want to focus on becoming ACA compliant to avoid penalties. All of the ACA provisions and extensive reporting requirements remain in place for employers.
Netchex carefully monitors federal and state legislative changes that affect human resource, benefits administration, payroll and tax for our clients. We ensure that our technology is constantly updated to reflect the latest compliance mandates and that our employers are prepared. To this end, Netchex has recently released its ACA Central tool that allows our clients to set up their ACA measurement periods and Reporting parameters once for ease and automation of ACA compliance. We are hosting webinars weekly to help our clients walk through their ACA setup. If our clients need assistance in finding affordable and compliant benefit plan options, we are able to provide expert consultation through our integrated NetBroker partnerships. For more information, or to register for a webinar, click here.