DC Appeals Court Overturns Subsidies for Federal Exchange

Federal Appeals Court invalidates some ObamaCare subsidies, in blow to health law.




In what could be a major blow to the Affordable Care Act, a three-judge panel for the U.S. Court of Appeals in Washington ruled today that subsidies may not be offered in the federal health exchange. The decision overturned a lower court ruling.


Though the ruling is likely to be appealed, the decision threatens to gut the foundation of the law by potentially nixing subsidies that millions of people obtained through the federally run exchange known as HealthCare.gov.


The suit maintained that the language in ObamaCare actually restricts subsidies to state-run exchanges -- of which there are only 14 -- and does not authorize them to be given to the 36 states that use the federally run system, which Ohio is one of. 


Background
Through the Affordable Care Act (ACA) in 2010, the federal government asked states to establish exchanges on which to sell qualified health plans. If a state did not establish its own exchange, the federal government would do so. Section 36B of the Internal Revenue Code (IRC) states premium assistance (i.e., tax subsidies) is available to individuals “… who were enrolled … through an Exchange established by the State under 1311” of the ACA. However, in 2012, the Internal Revenue Service determined that “established by the State” also included exchanges established by the federal government.




Two appellate court cases heard arguments regarding whether the subsidies are only available on the state-based exchanges, and not available on the federally run exchanges that are used by the majority of states:

• The Court of Appeals for the DC Circuit ruled that the ACA only authorized premium tax subsidies for people who enrolled in coverage through a state-based exchange, a more literal interpretation of section 36B of the IRC.
• The Court of Appeals for the Fourth Circuit ruled to uphold the interpretation that the intent of the ACA was to provide subsidies to anyone buying qualified coverage.

What does this mean in Ohio?


In Ohio, which has a federally facilitated exchange, everything stays the same for now. Subsidies are still available to our customers.  These appellate court decisions change nothing right away.


We will continue to follow the law as additional ruling are made.


We cannot speculate at this time what the outcome will be.  We will follow the issue closely and prepare ourselves appropriately,


Because there is a conflict between the rulings of the appellate courts, the losing side of each case can choose one of two options:

1. Request an "en banc" review, which is a full review by all judges in the particular court
2. Petition the Supreme Court to hear the case (the Supreme Court will begin hearing cases again this October)

Five Ways to Perk up Your Day

It happens to everybody. Sometimes we wake up on the wrong side of the bed. We miss trains. We dunk our neckties in coffee, and we don’t realize it until after an important meeting.

 

Every now and then a storm cloud will settle over your head. Rather than letting it ruin your day, try these simple steps to bring in a bit of sunshine!

 

1. Call a friend on his or her birthday. Check Facebook to find out which of your friends are celebrating birthdays today. Instead of just sending a short message, give them a call and wish them well. They will be glad to know you are thinking of them, and they will most likely send some good vibes your way, too!

 

2. Return a book you borrowed. Your friend lent you her personal copy of Don Quixote two years ago. She scribbled in the margins, spilled a little coffee on the cover, and dog-eared many, many pages. In other words, she loved that book. Don’t feel bad about returning it late. Even if you didn’t get around to reading it, she will be thrilled to see it again and it will take a little weight off your shelf and your shoulders.

 

3. Treat yourself to something sweet. Numerous studies have sought to measure the effects of chocolate on human happiness. It’s possible that dark chocolate can lower the stress hormone known as cortisol. It’s also possible that it’s delicious and you deserve it anyway.

 

4. Take lunch in the park. A little sunshine will help your body produce vitamin D and thereby increase serotonin—a mood neurotransmitter. Lunch in the park also dramatically increases your likelihood of sharing your sandwich with a duck.

 

5. Smile. According to the facial feedback hypothesis, exercising zygomatic (smiling) muscles can boost emotional activity in the brain. Simply smile a few times throughout the day. Think of it as an exercise, with you as a champion bodybuilder of positive energy.

Health Care Reform: Cost-Sharing Limits for Health Plans

Beginning in 2014 the ACA requires certain health plans to comply with cost-sharing limits with respect to essential health benefits coverage. The cost sharing limits include both an annual out-of-pocket maximum and anannual deductible limit.


 Call me for a copy of the Legislative Brief summarizing the ACA's cost sharing limits.


On April 1, 2014 President Obama signed into law the Protecting Access to Medicare Act which repels the ACA's deductible limit, effective as the date the ACA was enacted.


The affected plans are Grandfathered plans not subject to the ACA's cost-sharing limits.  There was some uncertainty regarding which types of non-grandfathered plans must comply with the cost-sharing limits.  However, the final rule provides the guidance on the types of health plans that must comply.

Funding College with Universal Life

Saving for college is a big concern for many young families.  There are many options available.  It can really confusing to choose.
An option that should be in the mix but generally gets overlooked-Permanent life Insurance.


Of course, the primary purpose of life insurance is to pay a death benefit when someone dies, but it can also be a very flexible alternative to traditional college funding programs.  This can really be appealing to certain clients because it includes features not found in any other program.


Think about it--what other college savings program is self-completing in the event of a premature death?  None.
However, the life insurance death benefit immediately creates a pile of money at death that can be used to fund the college savings goal and cover the college costs.


It also provides tax-deferred growth, just like most of the other programs do.  Income taken from the plan can be income tax-free through the use of loans and withdrawals and can supplement your other college savings sources.  You also have the added benefit of not having to include the accumulating cash values when filling out the required Federal Application for Federal Student Aid (FAFSA) form each year when applying for student aid.
That's Big !!
And finally, the policy can be repositioned after paying for college to then help supplement retirement planning.  And through all this it's still protecting the family with the death benefit.  That's pretty comprehensive.  None of the other programs have all these benefits.

CD Alternative Can Provide Benefit

Many of my clients today have become very comfortable with investing in CD's.  They invest in them more out of habit than anything else.  Here are some questions you can ask yourself the next time you consider a CD:

• Am I looking for guaranteed principal?
• Am I looking for tax deferral?
• Am I looking for a guaranteed income stream?
• Am I looking for potentially higher interest returns than what I am currently getting with my Bank CD's?

If you answer "Yes" to any of these questions, you may to look at one of my Deferred Annuities. 


While both a CD and an annuity can offer you a guarantee of principal, my Annuities off other benefits that CDs do not, including tax-deferred growth, a guaranteed income stream in the future, and a higher potential interest rates.


And with my Flexible Premium Annuity, you also have the ability to add additional money to your account at any time during the contract term, something you cannot do with most CD's.