DC Circuit Holds that Subsidies May Not be Extended to Federal Exchanges

Issuing its ruling shortly before the Fourth Circuit upheld such subsidies, the DC Circuit holds that the Affordable Care Act’s subsidies may not be extended to those who purchase insurance through a Federal Exchange as the statute provides for such subsidies only when purchased under a state maintained exchange.

Document Excerpt

We conclude that appellants have the better of the argument: a federal Exchange is not an “Exchange established by the State,” and section 36B does not authorize the IRS to provide tax credits for insurance purchased on federal Exchanges. We reach this conclusion by the following path: First, we examine section 36B in light of sections 1311 and 1321, which authorize the establishment of state and federal Exchanges, respectively, and conclude that section 36B plainly distinguishes Exchanges established by states from those established by the federal government. We then consider the government’s arguments that this construction generates absurd results but find that it does not render other provisions of the ACA unworkable, let alone so unreasonable as to justify disregarding section 36B’s plain meaning.

Link

http://www.cadc.uscourts.gov/internet/opinions.nsf/10125254D91F8BAC85257D1D004E6176/$file/14-5018-1503850.pdf

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