Supreme Court Upholds ACA Again

Supreme Court Upholds ACA Again

Obamacare Supreme Court Ruling

Supreme Court Upholds ACA Again

The U.S. Supreme Court ruled this morning that the Affordable Care Act may provide nationwide tax subsidies for people who purchase health insurance through an exchange.  The Court considered a challenge to a provision of the ACA concerning whether subsidies were available only to those who purchased health insurance on an exchange “established by the state.”  The Court, in King v. Burwell, ruled 6 to 3 in favor of upholding the eligibility for people to receive subsidies through either a state or federal health insurance exchange.

The opposite ruling would have had serious implications for the country due to the number of states relying on a federally-run exchange (37 states) and the number of customers who qualify for subsidies based on their income (about 85% of customers nationwide).   The Government’s argument prevailing:  defending the subsidies, the Government argued that if you look at the entire ACA and its history, it is clear that the subsidies are available to everyone who purchases insurance on an exchange, no matter who created it.

Please join us for upcoming Webinar on How to Prepare for Current and Future ACA Requirements.


Are you able to identify and address all of the ACA requirements? Have you developed a plan of action to help stay in compliance? This webinar will walk you through a three year case study and provide you with current and future solutions to help your group prepare for ACA challenges including the Cadillac Tax.

Some of the key webinar highlights include:

  • Will Federal subsidies stop in some states making residents unable to access subsidized Exchange coverage?
  • 3 year case study providing a practical view
  •  Will IRS information reporting still be required?
  • Could Congress step in and propose changes to the existing ACA law?
  • 2015 – Section 125 changes including eligibility, PRAs, excepted benefits and FSA plans for higher OOP exposure
  • 2016 – Renewal focus on HSA’s with a dollar for dollar matching contribution
  • 2017 – Further conversation of reducing benefit costs utilizing post deductible HRA’s and consideration of Defined Contributions

Practical information you can use – a webinar you will not want to miss!

Individual Mandate Upheld

Individual Mandate Upheld

At 10 AM today the Supreme Court in a 5-4 decision upheld the Patient Protection and Affordable Health Care Act’s individual mandate as constitutional.

The text of the opinion, in National Federation of Business vs. Sebelius, Case Number 11-393, is available here.

Imposition of a tax “leaves an individual with a lawful choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice,” Roberts says. “The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.”

According to Footnote 11, which is on page 44 of the slip opinion: Those subject to the individual mandate may lawfully forgo health insurance and pay higher taxes, or buy health insurance and pay lower taxes. The only thing that they may not lawfully do is buy health insurance and not pay the resulting tax.With this decision finalized, New York State (and the rest of the country) can now move forward with implementing the law.  We embrace the much-needed clarity and looking forward to working with our clients moving ahead.Millennium Medical Solutions Corp will be planning health care seminars to review the decision and overview to help understand the impact on employers, plan benefits, and providers.   We welcome your suggestions on specific topics or questions you want us to focus on.  Please join us!

Our office will continue to monitor events and inform our members of any other important news.


Imndiv Mandatae requirement_flowchart_3

Individual Mandate Penalty Chart

Supreme Court Ruling Expected Thursday

Supreme Court Ruling Expected Thursday


The biggest Supreme Court Ruling in a decae is expected this Thursday before the Summer recess.  Yet thats when the fun begins.Possible outcomes:

  • Delay hearing the legal issues associated with case for several years due to the Tax Issue.
  • Invalidate the Individual Mandate.
  • Invalidate all or part of the Medicaid Expansion requirements.
  • Uphold PPACA as is.
  • Declare the entire Act unconstitutional due to the lack of a Severability Clause if any of the key provisions such as the Individual Mandate overturned.

If individual mandate is repealed but leave other PPACA provisions in place, this outcome could greatly limit the coverage goals underpinning the Affordable Care Act and cause significant problems in the health insurance markets. For example, MIT economist Jonathan Gruber said, “Without a mandate the law is a lot less effective. The market will not collapse, but it will be a ton more expensive and cover many fewer people.”

While States such as NY may follow Massachusetts and set up their own Individual Mandate this becomes challenging with less Federal funding.   Funding for the individual market place subsidy with subsidies could collapse. See subsidy calculator here.

Eliminating the mandate would increase premiums and mean that far fewer of the uninsured would be covered. This is known as adverse selection where the sick population would be willing to pay higher premiums and forcing the healthy population to opt out of exchange.  States such as NY in fact have seen the Individual Market spiral out of control as they are high risk adverse group in order to supplement the preferred guaranteed non-preexisting condition group marketplace. Furthermore, NYS requires guaranteed issue for pre-existing condition for individual members with prior coverage.
If the court invalidates the individual mandate and leave rest of Act in tact it may lead to a death spiral.  Popular reforms such as overage 26 dependent coverage and expected pre-existing condition waiver in 2014 would possibly be dismantled.

The decision would punt health-care reform back to Congress, which “isn’t doing anything this year” and thus create major uncertainty going into the November elections. Taxes on pharma and medical devices would remain, while managed-care and hospital companies would suffer big losses. Insurers would be forced to take on sick patients without benefitting from the healthy ones who would have been enrolled under the mandate.

In this scenario, a lot of companies would simply cut their losses and leave the individual insurance market altogether; the law would essentially “run them out of business.

Either way the lack of uncertainty has delayed hospitals and insurers from new hires and taking decisive actions.  Same time next week we hope to celebrate July 4th with certainty.