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The Supreme Court decision (King vs. Burwell) upholding federal subsidies more or less guarantees some level of access to health insurance to all Americans. As we’ve discussed in earlier posts, the availability of subsidized coverage on the public exchange has made it easier for some employers to consider terminating employer-sponsored coverage for early retirees. Will it also be enough to trigger a re-evaluation of eligibility requirements within employer-sponsored health plans for active employees?

 

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In light of the recent US Supreme Court decision in Obergefell v. Hodges legalizing same-sex marriage nationwide, employers should consider the following implications for benefit plans and employment policies:

 

  • Revisit your definition of “spouse.” Make sure the definition covers same-sex spouses in plan documents, insurance policies, trust and service agreements, beneficiary forms, required notices, and employment policies.
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While many are saying "nothing changes" with the Supreme Court decision yesterday, that’s not really true. Now that employers can be confident that subsidized coverage will be available in all states, they can consider how the public exchanges might fit into their strategic planning for their health benefit programs. While very few employers are even considering terminating coverage for all active employees, the public exchanges could offer an alternative to maintaining plans for part-time employees or early retirees.

 

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In a 6-3 vote, the US Supreme Court upheld federal subsidies for health coverage from Affordable Care Act (ACA) health insurance exchanges in all states. While the King v. Burwell ruling, announced today, means that nothing changes, it also means that millions of people will be able to keep their subsidized health insurance on the public exchange.

 

 

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As we reflect back on the first five years under the ACA, there is one consistent theme — change. Change in the form of changes employers have made to their health benefit programs and change and delays in the implementation of the law. Could there be more ahead? There are certainly some possibilities.

 

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Capital Thinkers is an occasional series written by leading thinkers, experts, and policy makers from across the nation's capital. Today's guest blogger is Paul Fronstin from the Employee Benefit Research Institute.

 

The future of employment-based health benefits is always of strong interest in the work we do at the Employee Benefit Research Institute (EBRI). During an EBRI forum in 2014, EBRI members heard various viewpoints on its future in the aftermath of the implementation of the Patient Protection and Affordable Care Act (ACA) (see a recap of the discussion here). Since the panel discussion, issues have emerged regarding the King vs. Burwell case before the Supreme Court of the United States (SCOTUS). The outcome of this case has major implications for employment-based health benefits, yet many employers have yet to form an opinion about it.

 

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Last week on Mercer/Signal: US Health Care Reform, Tracy Watts explained the King v. Burwell case that will be heard by the Supreme Court starting next month, including possible fixes. Today, she discusses the consequences — both intended and unintended — of a decision to disallow federal subsidies for federally facilitated exchange (FFE) coverage, including the potential impact on employers.

 

In what could be a long list of consequences if the Supreme Court disallows federal subsidies for FFE coverage as a result of the King v. Burwell case, the biggest is a huge increase in the number of uninsured from the number today. The estimated 8 million people currently getting subsidized coverage in a FFE only foot 24% of the cost, on average, with the federal government picking up the rest. Without the subsidy they will most likely not be able to afford coverage. Here are a few of the consequences of most concern to employers:

 

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Oral arguments to the Supreme Court for King v. Burwell are scheduled to begin March 4, and a decision is expected sometime in June. The ACA case focuses on four words in the law: “established by the state.” A literal reading of the law would seem to exclude subsidies for anyone enrolled in a public marketplace not “established by the state” — meaning the exchanges operated by the federal government in 34 states. Without subsidies, many currently enrolled in these states will not be able to afford health insurance.

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