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The Wagner Law Group

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 


Established in 1996, The Wagner Law Group has 22 attorneys engaged exclusively in employee benefits, estate planning and employment law. Six of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.





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The Wagner Law Group


  Integrity | Excellence



Tel: (617) 357-5200 

Fax: (617) 357-5250 

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Boston, MA 02110

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Tel: (813) 603-2959

Fax: (813) 603-2961

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Tampa, FL  33602 


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Tel: (415) 625-0002

Fax: (415) 358-8300

315 Montgomery Street

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San Francisco, CA 94104


St. Louis

Tel: (314) 236-0065

Fax: (314) 236-5743
100 South 4th Street, Suite 550
St. Louis, MO  63102 







July 1, 2015


 Health and Welfare Law Alert




Supreme Court Upholds ACA's

Premium Tax Credits





The Supreme Court has ruled in King v. Burwell that the ACA's premium tax credits are available to qualified individuals who purchase medical coverage through either state or federally run Marketplaces.


Background. The ACA added a section to the Internal Revenue Code ("Code") which provides that the amount of premium assistance is based on the premium paid by a taxpayer enrolled through a Marketplace "established by the State." Each state is to establish its own Marketplace. However, if a state fails to establish its own Marketplace by January 1, 2014, the ACA requires the Department of Health and Human Services to establish a Marketplace within that state.


To date, only 16 states have set up their own Marketplace. In the other states, the Marketplace has been set up by the federal government or combines aspects of state and federal control.


The plaintiffs in King argued that the applicable Code section clearly provides that an individual must enroll in a state Marketplace in order to receive premium tax credits. The federal government countered that the law, when read as a whole, authorizes tax credits for any "applicable taxpayer" because a Marketplace established by a state includes a federally run Marketplace established on behalf of a state.


The Fourth Circuit Court of Appeals ruled in favor of the federal government, stating that the relevant Code section was ambiguous and therefore, it was required to apply the doctrine of judicial deference to the IRS's interpretation of the law.


Supreme Court Decision. The Court also ruled in favor of the federal government, holding that despite the section's ambiguity, the ACA's overall statutory scheme indicates that the premium tax credits are not exclusively available to individuals purchasing coverage through state run Marketplaces. Interestingly, the Court dismissed the Fourth Circuit's use of judicial deference to resolve the matter. Instead, the Court found that the availability of premium tax credits in states with federally run Marketplaces presented an issue of such "deep economic and political significance" that Congress could not have intended to delegate discretionary authority to regulators such as the IRS.


Takeaways for Employers. For employers, the King decision means that the ACA's employer shared responsibility provisions remain unchanged in all states. As a reminder, the employer shared responsibility provisions impose a tax on a applicable large employers ("ALEs") (i.e., an employer with at least the equivalent of 50 full-time employees) that do not offer a minimum level of affordable health insurance to employees and their dependents.  Specifically, an ALE is subject to an employer shared responsibility payment if at least one of its full-time employees receives a premium tax credit through a Marketplace.


Given the Court's decision in King that premium tax credits are available in all states and not just those with a state-run Marketplace, ALEs will be subject to the employer shared responsibility tax regardless of the state in which their employees live. Accordingly, to avoid the tax, employers must carefully consider the health insurance offered to employees.


NOTE Next week's Alert will discuss the Supreme Court's decision in Obergefell v. Hodges regarding same-sex marriage and its effect on welfare benefit plans.





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