Select Page

Spring Issue of Health Matrix, the Journal of Law-Medicine out of Case Western, had a great piece on Obamacare and the legality and eligibility of certain tax credits. The abstract is below. I advise that you read the piece in its entirety.

The Patient Protection and Affordable Care Act (PPACA) provides tax credits and subsidies for the purchase of qualifying health insurance plans on state-run insurance exchanges. Contrary to expectations, many states are refusing or otherwise failing to create such exchanges. An Internal Revenue Service (IRS) rule purports to extend these tax credits and subsidies to the purchase of health insurance in federal exchanges created in states without exchanges of their own. This rule lacks statutory authority. The text, structure, and history of the Act show that tax credits and subsidies are not available in federally run exchanges. The IRS rule is contrary to congressional intent and cannot be justified on other legal grounds. Because tax credit eligibility can trigger penalties on employers and individuals, affected parties are likely to have standing to challenge the IRS rule in court.

It looks like this regulation, just implemented by the IRS, is inconsistent with and likely violative of Congressional law.