A recent federal court ruling clarified a potentially confusing portion of the Affordable Care Act that relates to employer responsibilities and federal tax subsidies for uninsured workers.
In Halbig v. Sebelius, the federal court ruled that in states where ACA-mandated insurance exchanges are run by the federal government (instead of by the state), employers still have to pay a financial tax penalty if certain employees do not receive insurance, according to an Employee Benefit News article.
Additionally, qualified employees who purchase insurance in state exchanges operated by the federal government can receive tax credits to help pay for their insurance, according to the federal ruling.
At issue in the case was a portion of the ACA, under the Internal Revenue Tax code, that says, “eligible taxpayers may receive income tax credits for purchase of insurance “through an Exchange established by the State” under the portion of the act that allows states to create health insurance exchanges. The language did not mention state exchanges run by the federal government. Currently, there are 27 state exchanges facilitated by the federal government.
The court ruled that, yes, taxpayers can receive credits for purchasing insurance, regardless of whether the exchange was set up by the state or federal government.
Please read the entire article written by Alden J. Bianchi here.
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