Federal Courts Issue Conflicting Rulings on Subsidies in Federal Exchanges

Quick Facts

  • Several lawsuits challenge the government’s ability to provide subsidies in states that did not establish their own Exchanges.
  • On July 22, 2014, two federal appeals courts issued inconsistent rulings on subsidies in states with FFEs
  • The U.S. Supreme Court may ultimately decide whether subsidies are available in all states, including those with FFEs.
  • This issue may have a significant impact on employers due to the ACA’s employer mandate.

 

Several lawsuits have been filed by individuals and employers to challenge the ability of the federal government to provide tax credits under the Affordable Care Act (ACA) to individuals in states that did not establish their own Exchanges (that is, in states with federallyfacilitated exchanges, or FFEs). These lawsuits were filed in response to an Internal Revenue Service (IRS) rule that authorizes subsidies in all states, including those with FFEs...Read More