Supreme Court Backs Self-Funded Plans

supreme-courtIn a 6-2 decision on a case involving Liberty Mutual Insurance Company, the Supreme Court, in early March, held that ERISA pre-emption blocks the state of Vermont from requiring self-funded health plans to put claims data into a statewide health claims database.

This decision appeared to be consistent with the original intention of Congress to place ERISA plans under the jurisdiction of the U.S. Department of Labor rather than state insurance departments. In describing the decision as a victory for employer-sponsored health benefit plans that would avoid complications with plan administration, the CEO of the National Business Group on Health stated “while employers support the intentions behind Vermont’s law, we believe that a national approach to rules for all payer claims databases will be more productive and less costly.”

Dissenters, led by Justice Ruth Bader Ginsburg argued that the decision could hamper efforts to provide cost transparency by creating gaps in the data that employers, insurers, consumers, providers and state policymakers need to understand the effects of benefit plans and payment models.

Proposed Rules Implement Supreme Court’s Same-Sex Marriage Decision for Federal Tax Purposes

Same-Sex-benefitsNew proposed rules provide that a marriage of two individuals–whether of the same sex or the opposite sex–will be recognized for federal tax purposes if that marriage is recognized by any state, possession, or territory of the United States. The proposed rules implement the U.S. Supreme Court decision issued in June to reflect that same-sex couples can now marry in all states and that all states will recognize these marriages.

The proposed rules will apply to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA, and claiming the earned income tax credit or child tax credit. However, registered domestic partnerships, civil unions, or similar relationships not denominated as marriage under state law would not be treated as marriage for federal tax purposes.

Employers with questions on how to proceed regarding the administration of employee benefits for same-sex couples (or other applicable employment laws) are advised to review the proposed rules in their entirety and contact a knowledgeable employment law attorney.

For more information on same-sex marriage laws specific to your state, go to our State Laws section, click on your state, and select “Same-Sex Relationships” from the left-hand navigation menu.

Health Care Reform Update

balance-scalePremium Tax Credits Available to Individuals Enrolled in Federal or State-Based Exchanges

The U.S. Supreme Court has ruled that the Affordable Care Act’s premium tax credits are available to eligible individuals who enroll in qualified health plans through any Health Insurance Exchange (Marketplace), regardless of whether it is a state-based Exchange or a federally-facilitated Exchange.

The ruling comes in response to conflicting July 2014 court rulings in the District of Columbia Circuit Court of Appeals and the Fourth Circuit Court of Appeals, after each court considered whether the premium tax credits are limited under the law only to individuals who enroll in qualified health plans through state-based Exchanges.

The IRS is expected to provide updates regarding this matter on IRS.gov/aca.

Stay tuned for more on the premium tax credit. For general information regarding the credit, visit our Premium Tax Credit for Individuals section.