Supreme Court Again Upholds Affordable Care Act
Legal updates
Supreme Court Again Upholds Affordable Care Act
June 25, 2015
On June 25, 2015, the United States Supreme Court issued an opinion upholding a key provision of the Affordable Care Act which allows the federal government to provide tax subsidies to help poor and middle class people buy health insurance. King v. Burwell, 576 U.S. ___ (2015). This is the second time in three years that the Court has upheld the Affordable Care Act. In an earlier case, a divided Court upheld the law in a 5-4 ruling. Nat’l Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, (2012). Writing for the 6-3 majority in the most recent case, Chief Justice Roberts opined, “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way this is consistent with the former, and avoids the latter.” Justice Scalia authored a strongly worded dissent, criticizing the reasoning of the majority.
Given the strong majority opinion authored by Chief Justice Roberts in the Court’s most recent decision, it appears unlikely that future court challenges to this law will be successful. The Court has sent a clear message that it intends to uphold Congressional intent behind passage of the law. Following the ruling, President Obama observed, “After multiple challenges to this law before the Supreme Court, the Affordable Care Act is here to stay.”
In light of the current political situation, with a Democratic President committed to the Act and a Republican Congress opposed to it, significant legislative changes or repeal appear equally unlikely. Even if Congress voted to repeal the Act, it is unlikely that there would be sufficient votes to override a Presidential veto.
Under the circumstances, employers will need to continue to contend with the provisions of the Affordable Care Act, and must prepare for the so-called Cadillac Tax that will become effective on January 1, 2018. Those employers engaged in collective bargaining should carefully consider this issue before entering into multi-year labor agreements which might otherwise preclude changes needed to avoid the excise tax under the ACA.
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