The US Supreme Court is slated to hear oral arguments this Wednesday on whether consumers are eligible for federal tax subsidies under the Affordable Care Act (ACA) to help them pay for health policies bought on all public health insurance exchanges. Challengers in King v. Burwell argue the ACA authorizes the federal funds only for insurance policies purchased through state-based exchanges. The court is expected to rule by July.
US Health and Human Services Secretary Sylvia Burwell said in a letter last week the department has no administrative actions it intends to implement if the court rules against the Obama administration in the dispute. Senior Republican members of both the House and the Senate this week are working on contingency plans that would extend the health insurance subsidies for a transitional period if the court invalidates the IRS regulation that currently treats them as permitted.
People assessed an individual mandate penalty for failing to have health coverage during 2014 may still be able to enroll in public insurance exchange coverage for 2015. Recognizing this is the first tax filing season for consumers to pay a fee or claim an exemption for not having health insurance coverage, the Centers for Medicare and Medicaid Services announced qualifying individuals may enroll in a federally facilitated exchange between March 15 and April 30. To qualify for this one-time special enrollment period, a person must live in a state operating a federal exchange and attest that (i) when they filed their 2014 tax return they paid the fee for not having health coverage in 2014, and (ii) they first understood the impact of the mandate after the end of the regular open enrollment period (February 15) in connection with preparing their 2014 taxes. Some state-based exchanges are allowing similar extended enrollment periods. If these individuals don’t take this opportunity to enroll, they may face a second penalty when filing their 2015 income taxes.