On June 25, 2015, the United States Supreme Court issued the much anticipated decision in King v. Burwell and concluded that the tax credits allowed to eligible taxpayers for premiums paid under a Marketplace health insurance plan are available irrespective of whether a taxpayer enrolled in a state-operated exchange or a federal exchange. By doing so, the Supreme Court rejected the challengers’ literal reading of the applicable provision in the Affordable Care Act (the “Act”), which provides that tax credits are allowed if enrollment occurs though “an Exchange established by the State.”
The Supreme Court expressly acknowledged that the tax credits are a key component of the Act and are meant to make health insurance affordable for households with incomes between 100% and 400% of the federal poverty line. The Supreme Court also noted that the literal reading suggested by the challengers would render many provisions of the Act inapplicable. The Act would then be mostly ineffective in its attempt to require most individuals to obtain health insurance. The Court decided that the language at issue could not be read in isolation, but had to be interpreted in the context of the Act read in its totality. The Court stated that “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.” It then concluded that tax credits are allowed to all eligible taxpayers, even if they enrolled through a federal exchange.
This decision constitutes the second rejection by the Supreme Court of a major challenge to the Affordable Care Act. It is a clear indication that employers should continue to take appropriate steps in their implementation of health care reform.
Over the past decade, many employers extended dependent coverage under their group medical insurance plans to employees’ domestic partners. For many employers, this change was made in order to allow gay employees to add their partners to the plan. Given that same-sex marriage was illegal in most states, this addition was the only practical way to allow such employees to add their domestic partners to the plan. In some situations, this was the only way that these domestic partners could obtain medical insurance coverage. Employers typically extended such coverage to same and opposite-sex partners.
Given the Supreme Court’s Windsor decision and subsequent judicial overturning of gay marriage bans in most states, employers may be rethinking whether their group plans should include coverage for unmarried domestic partners. In addition to the legalization of same-sex marriage, the Affordable Care Act provides coverage options for domestic partners to obtain health insurance outside of the employer’s plan.
Extending dependent coverage to domestic partners entails certain burdens. For employers, coverage is usually conditional upon the receipt and review of affidavits certifying the couples’ domestic partner status. For the employees, such coverage can involve complicated tax issues.
Employers whose original intent was not to provide coverage to all unmarried partners, but only as a necessary means to allow gay employees to add their partners to the plan, may want to reconsider this plan option. A more “traditional” plan that requires that dependents, whether same or opposite sex, be married spouses, may result in a return to a more simplified plan structure.
The Equal Employment Opportunity Commission has made emerging issues in employment discrimination law one of its national enforcement priorities. Last week, the EEOC settled a lawsuit brought against a California seed and fertilizer provider, alleging that the employer required applicants to submit to pre-employment medical examinations that included solicitation of family medical histories.
Under the Genetic Information Non-Discrimination Act, employers cannot require applicants or employees to disclose family medical histories as a condition of employment. The EEOC claimed that the defendant refused to hire at least one applicant after he revealed that family members had suffered from a medical condition. In addition to violating GINA, the EEOC alleged that the pre-employment examination was in violation of the Americans with Disabilities Act, because the employer screened applicants based on medical conditions that were unrelated to the requirements of the job. The employer agreed to pay $187,500 and to adopt measures intended to prevent use of such medical examinations as a screening tool in its hiring.
Most employers and medical providers that conduct pre-employment examinations are aware of these requirements, and have deleted requests for family medical histories from their exams. In addition to complying with GINA, employers should periodically review their post-offer, pre-hire examination procedures to make sure that medical grounds used to exclude an applicant from employment are clearly and directly related to their essential job functions. If the exclusion is based on a possible ADA disability, the employer needs to fully explore available reasonable accommodations before making a final decision to reject the applicant.
Jonathan Crotty has been a successful counselor and problem solver for large and small employers in the Carolinas and beyond for over 20 years. He heads Parker Poe’s Employment and Benefits practice group and represents employers in all aspects of the employment relationship, from hiring to discharge.