The Obamacare see-saw — an opposing decision on subsidies

Some days are just more fun that others!

Just hours after the D.C. Circuit Court of Appeals issued its opinion in Halbig v. Burwell, which held that tax subsidies made available under the Affordable Care Act (“ACA”) to lower income individuals to help defray the cost of health care coverage may not be extended to individuals who reside in states that have elected not to establish their own health care exchanges, the 4th Circuit Court of Appeals today issued a unanimous decision today in King v. Burwell that upholds entitlement to tax subsidies available under the ACA for all eligible lower income individuals—whether or not they reside in a state that has established its own health care exchanges under the ACA (see http://www.ca4.uscourts.gov/Opinions/Published/141158.P.pdf). As in Halbig, the plaintiffs in King argued that Congress intended that the subsidies only be available in states that set up their own exchanges.  In essence, the plaintiffs were challenging the interpretation of the ACA made by the Internal Revenue Service (the “IRS”) that authorized the IRS to grant subsidies to individuals who purchase health care coverage both through state-sponsored exchanges and through the federally-run exchange.  Like the plaintiffs in Halbig, the plaintiffs in King argued that the IRS’s interpretation was contrary to the language in the ACA. The Fourth Circuit panel viewed the issue quite differently, and upheld the system of federal subsidies now available under the ACA.

In affirming the decision of the District Court judge in King, the panel acknowledged that the language in the ACA on this question was ambiguous. The panel decided it was appropriate to extend deference to the interpretation of the IRS, and thus upheld the interpretation that subsidies were available no matter whether a state had established its own exchange.

We are early in this game, but with today’s dueling decisions coming down on opposite sides of this issue, one has to assume that it is increasingly likely (perhaps virtually certain) that this issue is headed to the United States Supreme Court for resolution. Here we go again.

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More Disabled Employees But Fewer Employees Covered With Long Term Disability Coverage

Here is a recent news item showing the scope of the employee disability problem.

In a nutshell:

There are more disabled employees than ever.  As of May 2014, the total number of Social Security disability beneficiaries in the United States hit an all-time high of about 11 million beneficiaries.

But fewer employees are covered with long term disability coverage.  The number of U.S. workers with long-term disability coverage decreased 6% from 2009-2013.

From 2009-2013:

  • fewer employers are offering long term disability coverage: down from 220,000 to 214,000
  • fewer employees have long term disability coverage: down from 34 million  to 32.1 million
  • more total number of employees in the U.S. workforce: up 6.6 million

An excellent article out of the July 17, 2014 Portland Press Herald summarizes the issue. http://www.pressherald.com/2014/07/17/employers-dropping-long-term-disability-coverage/

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