Tag Archives: insurance exchange

Supreme Court Rules in Favor of Obama Administration

The Supreme Court ruled in favor of the Obama Administration in the controversial King vs. Burwell court case.  The 6-3 decision confirms that the Affordable Care Act allows for tax subsidies to flow through both state-based marketplaces as well as the federally organized health insurance exchange.  While the political implications are significant, this ruling should have little impact on business as usual.

To read the full story, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

 

Another Ruling on Subsidies by a Federal Judge

Though New York is unaffected, yet another ruling that affirms enrollees in the Federal Exchange cannot receive subsidies.

A federal judge in Oklahoma has ruled that Obamacare subsidies cannot go to residents of states that are not running their own insurance exchanges, a second blow to the Obama administration on a issue that threatens a key element of the health law’s coverage expansion.

Judge Ronald A. White said that the administration’s decision to allow subsidies to go through either a state-run health insurance exchange or the federal exchange is an improper and invalid reading of the Affordable Care Act and must be struck.

White’s ruling marks the second judgment against the government on the subsidy question and comes as the Supreme Court could decide whether to weigh in.

“The court holds that the IRS rule is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law,” White wrote in his ruling. The IRS had allowed people to get subsidies in all states.

Oklahoma Attorney General Scott Pruitt, who brought the lawsuit, welcomed the decision.

“Today’s ruling is a consequential victory for the rule of law,” he said in a statement. “The administration and its bureaucrats in the IRS handed out billions in illegal tax credits and subsidies and vastly expanded the reach of the health care law because they didn’t like the way Congress wrote the Affordable Care Act. That’s not how our system of government works.”

Split decisions in U.S. appeals courts came earlier this year. The 4th Circuit Court of Appeals in Richmond, Va., ruled with the Obama administration, saying the IRS had the right to allow the subsidies to go to residents of any state. The D.C. Court of Appeals ruled against that regulation but it recently vacated that decision when it decided to have the full court, not just a three judge panel, rehear the case.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

New IRS Forms for Tax Credits

If you got health coverage through President Barack Obama’s law this year, you’ll need a new form from your insurance exchange before you can file your tax return next spring.

Some tax professionals are worried that federal and state insurance marketplaces won’t be able to get those forms out in time, creating the risk of delayed tax refunds for millions of consumers.

The same federal agency that had trouble launching HealthCare.gov last fall is facing the heaviest lift.

The Health and Human Services Department must send out millions of the forms, which are like W-2s for people getting tax credits to help pay health insurance premiums.

The form is called a 1095-A, and it lists who in each household has health coverage and how much the government paid each month to subsidize their premiums. Nearly 5 million people have gotten subsidies through HealthCare.gov.

If the forms are delayed past their Jan. 31 deadline, some people may have to wait to file tax returns — and collect their refunds.

A delay of a week or two may not sound like much, but many people depend on their tax refunds to plug holes in family finances.

The uncertainty is unnerving to some tax preparation companies, which try to run their filing season operations like a military drill. The Obama administration says it’s on task, but it won’t provide much detail.

States operating their own health insurance marketplaces will also have to send out the forms, but the federal exchange serving 36 states has the biggest job. HHS will have to manage that while in the midst of running the 2015 health insurance sign-up season, when millions more are expected to try to get coverage.

“It’s very unrealistic to expect that they would be able to implement a process that distributed these forms in the middle of open enrollment, and on time,” said George Brandes, vice president for health care programs at Jackson Hewitt Tax Service.

The average tax refund is about $2,690, and people who count on getting money back often file early.

Jeffrey R. Ungvary President

To read more, click here.

Jeffrey R. Ungvary