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Commonwealth Foundation


Court Ruling Calls Obamacare Mandates Into Question

by News Release
 

Contact:
John Bouder, 717-671-1901
Individual ~Employer Mandates Called into Question in 36 States

Pennsylvanians May No Longer Qualify for Subsidies on Obamacare Exchange

Today, the U.S. Court of Appeals for the D.C. Circuit ruled the IRS could not
provide tax credits or subsidies to individuals with insurance policies purchased on the federal health exchange. The ruling calls into question whether major portions of the Affordable Care Act–the individual and employer mandates–can be implemented in as many as 36 states, including Pennsylvania.

"Back in 2012, people laughed at the idea of challenging Obamacare's individual and employer mandates on the premise that the law as written allows subsidies for insurance only in state–not federal–exchanges," commented Elizabeth Stelle, senior policy analyst for the Commonwealth Foundation. "But if today's ruling stands, an estimated 357,000 Pennsylvania residents will be freed from Obamacare's individual mandate tax. In addition, 15,000 employers with 3.9 million workers will be free of the employer mandate."

Under the employer mandate, employers can only be fined when their employee receives a subsidy from the exchange. Similarly, an individual can only be fined if the cost of their insurance would be less than 8 percent of their income after subsidies. If such subsidies become illegal, vastly more people will qualify for the affordability exemption and employers will have no penalty.

Stelle continued:

"If the ruling is upheld, many will argue that the court is taking away tax credits, but in reality the blame lies with the Obama administration and the IRS which moved forward with doling out taxpayer funds in violation of the Affordable Care Act. Effectively, the ruling means that the cost of insurance will no longer be shifted onto taxpayers via the more than 20 new taxes created as part of Obamacare.

"The fact is the Obama administration has been violating its own health care law to impose new burdens on Pennsylvania residents and a new tax on employers. It's time for the administration to start implementing the law as written."

The next step is unclear, but the case will likely go to the Supreme Court. If the Supreme Court rules in Halbig's favor, subsidies on federal exchanges will be illegal.

Elizabeth Stelle and other Commonwealth Foundation experts are available for
comment. Please use the contact information below to schedule an interview.

Best,

John Bouder
Communications Officer
Commonwealth Foundation
Phone: 717-671-1901
jrb@commonwealthfoundation.org
Commonwealthfoundation.org


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