Supreme Court Docket Report - November 7, 2014

Affordable Care Act—Availability of Tax Credits

The Patient Protection and Affordable Care Act (ACA) created state-wide health insurance exchanges.  Individuals are now generally required to obtain qualifying health insurance coverage or to pay a tax penalty.  Low-income individuals who do not qualify for Medicaid are entitled to tax credits to subsidize the purchase of health insurance when they acquire that insurance through the exchange "established by the State" under 42 U.S.C. § 18031.  26 U.S.C. § 36B(c)(2)(A)(i).  Today, the Supreme Court granted certiorari in King v. Burwell, No. 14-114, to decide whether that provision can permissibly be construed by the Internal Revenue Service to permit tax credits for individuals who acquire insurance through exchanges operated by the federal government in states that do not administer their own exchange.  The Court's resolution of this issue will be of substantial importance to health insurance plans and health care