ACA News & Publications

ACA Pathways: Supreme Court Hands Victory for ACA Subsidies in the Federal Marketplaces

June 25, 2015

Today, the Supreme Court, in a 6-3 decision, upheld the availability of subsidies in all States, including those with Federally- facilitated health insurance Marketplaces.

In King v. Burwell, the case challenging the availability of subsidies in the 34 states with Federally-facilitated Marketplaces, the Court rejected the argument that the language of the Affordable Care Act (ACA) authorized subsidies only in states that had set up their own Marketplace. With this ruling, the Court held that, in drafting the ACA, Congress intended for the Federal government to provide subsidies in all states—those that established their own Marketplace and those that have Federally-facilitated Marketplaces.

The decision is significant for a number of reasons. The ACA remains intact. Without the availability of these subsidies in all states, several other key ACA provisions would not operate as intended, including the individual mandate and the employer shared responsibility rules. For example, if the subsidies were available only in State Marketplaces, employers would not be subject to penalties for employees living in states with a Federally-facilitated Marketplace. However, because the subsidies remain available in all states, the employer shared responsibility penalties will still apply for employers in all states. Furthermore, over 6.4 million individuals who are currently covered through the Federally-facilitated Marketplaces and receiving subsidies can continue to do so. In addition, an adverse decision would have potentially caused serious disruptions throughout the whole health insurance market, especially in those states with Federally-facilitated Marketplaces.

The full Supreme Court ruling is available at

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