In the much anticipated ruling, the US Supreme Court ruled today by a 6-3 decision that the individual tax credits available through the Federal Exchange (Healthcare.gov) are legal and constitutional. This ruling will continue to allow individuals who purchased medical insurance through the federal exchange to receive their premium subsidy. If this ruling had swung in the other direction, this would have resulted in an upheaval of the individual insurance market affecting over 6 million Americans.

Although this case would not have directly impacted employers and their obligations through the Affordable Care Act (ACA), it would have placed a major dent in the ACA law. This could have resulted in amendments to the ACA law that could have trickled down to employers. As a result of the Supreme Court's ruling today, there are no changes to the ACA regulations.

Background

Healthcare Reform (ACA) provides the opportunity for states to decide whether to establish their own Public Healthcare Exchange or use the Federal Healthcare Exchange. Currently 16 states, including California, run their own state exchange with the other 34 states depending on the Federal Exchange.  The exchange provides a market place for individuals who are not offered affordable minimum essential coverage, through their employer, to purchase an individual medical plan and receive an income-based premium subsidy. The ACA program reduced the premium for millions of Americans in an effort to make medical insurance more affordable.

The case that was presented to the US Supreme Court argued that the ACA law specifically stated that subsidies are available in the Public Exchange "established by the state" and, therefore, premium subsidies are not eligible within the Federal Exchange.