The panel ruled that the federal health exchange was not empowered to provide subsidies to individuals purchasing health insurance from it; that only state-run exchanges could allocate such subsidies. In other words, the panel’s decision represents a narrow statutory interpretation of the provision that was challenged in court, which took many in the legal, political and healthcare circles by surprise. 

Almost concurrently, the 4th Circuit Court of Appeals in Virginia came to the opposite conclusion, declaring that the federal subsidies were well within the letter of the law and the purview of the Internal Revenue Service (IRS) to allow them.

The case is far from over. For starters, the Obama Administration plans to appeal to the full D.C. Circuit Court, where 7 out of 11 judges are Democratic appointees. What’s more, challenges to the federal subsidies may also be heard in courts in the 7th and 10th circuits. 

Many observers expect that the verdict will ultimately be heard by the Supreme Court, which last ruled in favor of the constitutionality of the ACA in 2012 while exempting states from having to comply with the law’s Medicaid provision. That “opt-out” measure has denied affordable care to hundreds of thousands, if not millions, of uninsured Americans.

It set the stage for challenges like the current one making its way through the legal system, and potentially back to the High Court for review. Read more on this topic from The Hill. 

Far-reaching Implications

The challenge to the ACA provision has the potential to effectively derail the country’s first attempt at providing health insurance to the 40 million+ Americans who were uninsured prior to President Obama signing it into law in 2010. To date, more than 5 million individuals have purchased insurance through both federal and state-run health exchanges (largely aided by federal subsidies to make the care affordable), with another 2 million expected to sign up by 2016, according to EBN News.

If the subsidies are ultimately deemed illegal, the lion’s share of these people – many of whom are full- or part-time employees who don’t qualify for or can’t afford company-provided health insurance – will revert to having inadequate or no health insurance at all. And insurance companies and healthcare providers (many of which are large employers in their respective communities) will suffer the consequences as the pool of affordable premiums is turned on its head. And the ACA will be effectively nullified.

The implications are no less serious for employers that have relied on federal subsidies for their employees; the employer mandate to provide insurance at thousands of companies; not to mention benefits managers whose jobs may be made more complicated by the ACA being dismantled than they’ve already been made in striving to implement its provisions for the past four years. 

At the same time, nothing is likely to change until the case is decided definitively one way or the other (perhaps not before 2016), so many health insurance and HR professionals are urging benefits managers to reassure their work forces that they will continue to have coverage, subsidized or otherwise – at least in the near term. 

Both the federal and state-run exchanges plan to sign up applicants in the second year of enrollmentstarting in November.[

A National Identity Crisis

That said, where does this legal challenge leave us in 2014, and what does it say about us as a nation? 

For a country still struggling to get back on its feet after the most severe economic downturn since the Great Depression, with an unemployment rate that’s finally headed in the right direction, it represents the potential to plunge a sizable number of Americans back into poverty. If the ACA is ultimately fragmented and gutted, President Obama will have failed to make the United States the last industrialized country to provide affordable health insurance for the majority of its citizens, notes a recent article from The New York Times.  

In effect, that would doom his presidency to certain failure in the eyes of the rest of the world, if not the history books. As it is, his ratings are at an all-time low, and the complicated geopolitics of the 21st century already threaten to doom his administration and any of his progressive accomplishments.

But perhaps even more significantly, turning back the clock on the closest we’ve ever come to universal healthcare coverage highlights the fact that we are as divided a nation as we’ve been since the Civil War.

Mr. Obama campaigned for president on the premise that we are neither a nation of red states nor blue states; but one of united states with shared goals and aspirations. 

Sadly, his words ring hollow as a bitterly partisan and ineffectual Congress fails to protect the middle and working classes.

As HR professionals, we can and must do our best to provide the best available services to our employees and our organizations – especially those that stand to lose the most if ObamaCare is downsized. Let’s hope we get clarity on the future of the ACA sooner rather than later.