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IRS to Continue Allowing Federal Exchange Enrollees to be Eligible for ACA’s Premium Credit, Despite Circuit Split

In the wake of conflicting rulings by two federal appellate courts, IRS has decided to continue following established regs under Code Sec. 36B’s premium tax credit provision, which provide that the credit is available to persons enrolled in federally-facilitated as well as state-operated exchanges, IRS Commissioner John Koskinen told a congressional panel on July 23. ( Testimony of John Koskinen Before the House Oversight and Government Reform Committee’s Subcommittee on Economic Growth Job Creation and Regulatory Affairs, 7/23/2014 )

The agency currently has no plans to alter or rescind the regs, nor does it contemplate any changes to its preparations for the 2015 filing season, Koskinen said. Once the issue is finally resolved by the courts, IRS will act accordingly, he said, adding that he considers the regs appropriate.

On July 22, the Court of Appeals for the District of Columbia Circuit, in Halbig, et al. v. Burwell, (2014, CA DC) 114 AFTR 2d ¶2014-5068, invalidated the regs. The same day, the Fourth Circuit, in King v. Burwell, (2014, CA4) 114 AFTR 2d ¶2014-5071, upheld the regs. (See Pension and Benefits Week ¶  7  7/28/2014 for details on the two appellate court decisions.)