On Monday, July 21, the U.S. Circuit Court of Appeals published its opinion prohibiting the ability of the federal government to provide insurance premium subsidies through income tax credits to participants in the federally run Exchanges. A three-judge panel came down with a 2-1 decision prohibiting the subsidies.
Absent future court action to reverse this decision, nearly 87% of the 5.4 million enrollees in the federal Marketplace receive subsidies, most of which are as high as 75% of total premium. The average annual subsidy for this group is nearly $4,000.
This ruling does not impact California residents. Covered California is a state-sponsored exchange.
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