Fourth Circuit Properly Upholds IRS Provision, Circuits Now Split

Fourth Circuit Properly Upholds IRS Provision, Circuits Now Split

WASHINGTON—On the heels of a hotly contested divided opinion in the D.C. Circuit Court, the Fourth Circuit Court of Appeals has issued a unanimous opinion upholding the Affordable Care Act’s (ACA) tax credits in King v. Burwell. The decision came down just hours after the U.S. Court of Appeals for the D.C. Circuit reached the opposite ruling in Halbig v. Burwell.

“Unlike the D.C. Circuit, the Court in King has reached the proper decision by following long-standing rules of legal construction,” said Elizabeth Taylor, NHeLP’s executive director. “Here, the law has prevailed.” 

In cases where congressional language has multiple interpretations, courts must defer to the federal agency charged with implementing the law. In King, the Court found that the ACA’s provision governing tax credits is ambiguous and therefore that the court must defer to the implementing agency, the Internal Revenue Service (IRS). As a result, the IRS’s regulation making tax credits available to eligible persons in all states, regardless of whether the Marketplace is state-run or federal, must stand. 

“The repeated legal attacks on the ACA across the country bear all the hallmarks of politics rather than sound legal arguments,” said Jane Perkins, NHeLP’s legal director. “It is a shame that some individuals and politicians are putting their hatred of Obamacare before the health of Americans. Hopefully the Fourth Circuit’s opinion will restore rationality to the situation as we move forward.” 

The D.C. Circuit will likely re-hear the Halbig decision before the full 11-judge panel. Neither of today’s cases will have an immediate impact on the ACA. Individuals across the country will continue to receive the ACA’s tax credits and subsidies, ensuring they can afford the health care they need. 

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