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Conflicting rulings on Obamacare-related subsidies raise new questions

At issue is some wording in the law related to the marketplaces, or exchanges, which let Americans purchase health insurance

Conflicting rulings related to the Affordable Care Act from two neighboring federal appeals courts may put Obamacare at further risk.

The two decisions were both released this week, and the conflict may eventually make its way to the Supreme Court. The high court recently decided in Hobby Lobbythat many closely held corporations do not have to pay for birth control of employees if offering it violates the owners’ religious beliefs.

It now appears that employers may be less likely to send their employees to exchanges for health insurance, if the exchange will not let an employee receive a government subsidy, he speculated.

When it comes to advice to general counsel, Larry Vernaglia, a health care lawyer with Foley & Lardner, in a statement to InsideCounsel said, they should be “following these cases – at least for their broad impact.  If the DC Court of Appeals decision ultimately stands, it could mean, at least, that there will be an increase in the number of uninsured, low-income patients in markets where the states have not implemented an exchange.  Of course, this outcome could be some time in the future.  Until that time, health care organizations should also be prepared to submit friend of the court (“amicus”) briefs detailing both the legal and practical impact of these decisions.”

In addition, Paul Hamburger, co-chair of Proskauer’s Employee Benefits, Executive Compensation & ERISA Litigation Practice Center, said in a statement, “This case also impacts employers in that if no credits are available, then individuals dropping employer coverage for exchange coverage cannot trigger ‘pay-or-play’ penalties.”

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Ed Silverstein

Ed Silverstein is a veteran writer and editor for magazines, websites and newspapers. A graduate of Harvard's Kennedy School of Government, he has won several...

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