The Supreme Courts decision to uphold the legality of tax subsides offered to individuals enrolling in health care coverage on the federal exchange lifts a veil of uncertainty and shifts the focus for advisers and their employer clients back to compliance with the Affordable Care Act, industry insiders say.
The Supreme Court ruled Thursday that subsidies used to purchase health insurance on the federally facilitated marketplace are legal. The 6-3 decision in King v. Burwell means that tax credits continue to be valid in the 34 federally-facilitated marketplace (FFM) states.
The Supreme Courts decision has clarified an important question now we can move forward with a greater degree of certainty, says Don Goldmann, vice president of the Word & Brown General Agency and incoming president of the National Association of Health Underwriters.
The court has once again rescued a significant piece of the Affordable Care Act, says Mark Holloway, senior vice president, director, compliance services, Lockton Benefit Group. Todays decision removes the uncertainty surrounding the fate of the employer mandate in the 34 states depending on the federally-operated marketplace for employers doing business in one or more of those states. The employer mandate is alive and well.
Its keeping everything status quo for plan sponsors and their advisers, agrees Julie Stich, IFEBPs director of research.
Its shifting the focus back to ACA compliance and management, she adds. Employers and their advisers are going to return to looking at upcoming provisions and administrative measures gathering information, reporting on the 1094 or 1095 forms and looking at new tweaks to the summary of benefits coverage. Employers are also looking ahead to the 2018 Cadillac tax.
It is important that brokers alert their clients about the ruling and what it means for them and their employees, Goldmann says.
Sigh of relief
For my clients that are receiving tax credits to help them afford their policies, it's basically a sigh of relief, says Kelly Fristoe, president and CEO of employee benefit brokerage Financial Partners in Wichita Falls, Texas. For the health insurance companies that would have otherwise eventually lost a large number of individual clients, it's a sigh of relief. For us agents, business will continue as it has been. We'll continue to be a resource to our clients in helping them make the best financial decisions possible in their purchase of health insurance plans, both on and off exchange.
Also see: "The real lesson from SCOTUS subsidy decision."
Adds Bob Reiff, president of the Lockton Benefit Group, Regardless of what comes next, this decision impacts many of our 41,000 clients who have been working hard over the last five years to meet the health reform laws employer mandate, he says. As always, we will continue to partner with our clients to navigate the dynamic, twisting and turning road that is the Affordable Care Act.
Julie McNeely, president of the National Association of Insurance and Financial Advisors, agrees. Advisers have played a pivotal role in helping individuals and businesses understand both their opportunities and obligations under the ACA, and they will continue to do so, she says. They help individuals and families enroll through the marketplaces or find more suitable coverage outside the marketplaces. They work with clients to ensure they get the best coverage and prices to suit their specific needs. They help employers set up benefits plans and comply with the law. These needs will certainly continue after the King v. Burwell decision, and NAIFA members remain committed to providing professional advice and services.
Going forward, Kevin Roberts of KR Benefits Insurance Company predicts fewer challenges to the ACA. I think we'll see less challenges to the law now, at least through the court system. It was a stretch to think that the original drafting of the law only meant to have subsidies for states that formed exchanges, he says.
He adds, The myriad of unintended consequences, especially in the repayment of subsidies to the IRS by not predicting better fortune will eventually need to be addressed. It seems unlikely to happen under the current administration. So, it will be the 2016 presidential election that will determine the laws second act.
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