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Implications of This Week’s Supreme Court Decisions for Employers

Affordable Care Act Status Quo Maintained
In a 6-3 decision on Thursday, the Supreme Court upheld the subsidies provision of the Affordable Care Act (ACA).

At issue in the case, King v. Burwell, was whether a specific phrase in the ACA limited the availability of subsidies to help individuals pay for health insurance coverage to state-established exchanges. The majority of states have exchanges established by the federal government rather than by the state. If the Supreme Court had ruled that the ACA prohibits subsidies in federally-established exchanges, the insurance coverage mandated by the ACA would have become unaffordable for many people in these states. Most commentators agreed that without the availability of subsidies in all exchanges, the stability of the ACA, which is built on the assumption of widespread participation, would have been threatened.

Although it removes some uncertainty regarding the ACA’s standing, the ruling allowing subsidies to continue will have little immediate impact on employers, as it maintains the ACA as it has been. Employers will need to continue to ensure that they are complying with all of the ACA’s requirements.

The Court’s opinion and Justice Scalia’s dissent can be read here.

Same-Sex Marriage Allowed Nationwide
The Supreme Court has ruled that all states must allow and recognize same-sex marriages. In an opinion issued today, the majority of the Court found that marriage is a fundamental right and that it would be a violation of equal protection if the right to marry was not extended to same-sex couples.

For employers, this ruling may impact your employee benefits. You will need to ensure that benefits offered to or mentioning “spouses” are applied to the spouses of all legally married employees, including those in same-sex marriages. Most employer benefit policies already use the word “spouse,” so most of the changes will be procedural. Three of the most likely benefit changes are:

  • If you offer health insurance benefits to spouses, extend the benefits to same-sex spouses.
  • For family leave policies, include same-sex spouses in the defined category of “family member.”
  • Cover same-sex partners in your pension and retirement plans in the same manner as opposite-sex spouses.

Employers should review their benefit plan documents, forms, policies, and handbook language to make sure that the language used within them would cover same-sex as well as opposite-sex spouses. Additionally, some employers have chosen to offer additional domestic partner benefits to same-sex couples in recognition of the inability up until now (in some states) to cover them as married. Those employers will need to decide whether to retain this benefit and, if so, whether to extend it to opposite-sex unmarried couples. Finally, employers should be careful to follow the same administrative procedures for all married employees. For example, if an employer does not require a marriage certificate to verify spousal status for opposite-sex couples, the employer should not require it from same-sex couples.

The Court’s opinion and the dissenting opinions can be read here.

Content provided by TPC HR Support Center.