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Supreme Court Agrees to Hear Case That Could Kill Obamacare

By Adam Bluestein | Small Business

The Affordable Care Act's employer mandate may be in jeopardy as the Supreme Court takes up the case.

In a surprising move, the Supreme Court announced today that it will hear King v. Burwell in its current term. The hearing could start as soon as March.

At issue is whether or not the Internal Revenue Service had the right to extend tax-credit subsidies to health coverage purchased through exchanges established by the federal government--or only to coverage purchased in state-established exchanges. The actual language of the Affordable Care Act clearly states that only coverage purchased through an exchange "established by the state" can qualify for subsidies. Yet 36 states chose not to set up health-insurance exchanges, opting to let their residents buy coverage through the federal Healthcare.gov site instead. In May 2013, the IRS issued a clarifying rule, saying that people in these states could also qualify for subsidies.

A decision in favor of the plaintiff in King v. Burwell would cut off insurance subsidies to people in these states, which would be disastrous for President Obama's signature health-care law. It would also be a big deal for businesses, because Obamacare's employer-mandate penalties are triggered only when employees qualify for subsidies. For more on how this Supreme Court ruling could affect your business, read our previous coverage.

Scotusblog.com also has a detailed analysis of the Court's decision.

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