Two contradictory rulings have recently been issued by federal appeals courts on whether people enrolling through Federal Marketplaces (like in Texas) are eligible for subsidies to help pay for their coverage.
The Fourth Circuit Court of Appeals (Richmond, VA) ruled that individuals enrolled through Marketplaces established by the federal government are eligible for subsidies. The D.C. Circuit Court of Appeals ruled that subsidies could go only to individuals enrolled through Marketplaces established by states.
In both cases, a review by the full panel of judges on each of these Circuit Courts is almost certain to be requested, and appeals to the Supreme Court are likely if the lower courts remain split.
The law remains unchanged and current subsidies will remain in place until the legal case plays out, which I likely not to be until mid 2015.
For now, individuals will continue to get their plans subsidized for 2014 and 2015. If it is found by the courts that individuals purchasing on the Federal Exchange are not eligible for tax credits they will thereby be exempt from the individual mandate penalty as well as any employers over 50 that may have been required to offer coverage to their employees.*
*This document is for general informational purposes only. While I have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and Texas Medical Plans makes no representations or warranties regarding its accuracy or completeness. The information provided should not be construed as legal or tax advice or as a recommendation of any kind.
