Two major appeals courts released opposing decisions on July 22 that could profoundly affect whether employers will face penalties for failing to meet the health coverage requirements in the Affordable Care Act (ACA).
The Fourth Circuit Court of Appeals upheld IRS regulations allowing individuals to receive premium tax credits to purchase insurance on federal health care exchanges, while the D.C. Circuit invalidated the regulations and said the credits are available only on state-run exchanges. The decisions are important for employers because whether individuals qualify for premium tax credits affects whether employers are subject to excise taxes for failing to meet ACA health coverage requirements.
Employers with at least 50 employees will be subject to the new requirements in 2015 or 2016, and it is important for them to understand the implications of the ruling.
See Tax Flash 2014-09 for details.
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