Subsidies are an essential element of the Affordable Care Act (ACA). However, depending on how the U.S. Supreme Court rules in the King v. Burwell case, those tax subsidies may go away. The recent case calls into question the legality of tax subsidies as part of the ACA. The court is expected to issue a decision in June.
Currently, tax credits are available for those who buy insurance through state-established exchanges. However, those arguing the validity of these credits say the states that chose a federally operated marketplace shouldn’t have subsidies because the law doesn’t state that they should receive them. Federal officials disagree. They argue that the law is clear about eligibility, and that residents of every state should be able to receive subsidies.
The Top Court’s decision on ACA subsidies will affect a vast number of people, including employees, business owners and the roughly 100,000 residents who purchased insurance from outside the marketplace. In addition, the tax credits have benefited NJ businesses, keeping more healthy workers on the job. If access to healthcare goes down the drain, businesses will have to absorb the costs of the reduced productivity that will inevitably follow.
The Affordable Care Act subsidies cover low income citizens and legal immigrants who have been in the country for at least five years. In 2010, Gov. Chris Christie ended the FamilyCare coverage subsidy for immigrants who have been in the country for less than five years, even if they are legal. “These are working-class individuals,” reporter Raymond J. Castro, New Jersey Policy Perspective’s senior analyst. “They are throughout the state and they really go beyond the usual political boundaries.”
Analysts believe that the loss of subsidies will make many low income families drop their insurance. A mass-exodus of insured individuals is bad for many reasons, and a RAND Corp. study predicts that the loss of subsidies will result in a 47 percent average premium increase in 2015. This is because the healthy people are more likely to drop their coverage, and the people with health problems will see no choice but to keep it. Less healthy people enrolled causes insurers to increase their premiums.
If you are concerned about how this decision will affect your business, consult with an experienced employment attorney today. Posternock Apell, PC are ready to provide you with sound legal guidance as you seek to grow and expand your business. Contact us today.