The Affordable Care Act returns to the U.S. Supreme Court next week, and educators are watching from several perspectives.
The justices on March 4 will weigh whether President Barack Obama’s administration overstepped its authority when it extended subsidies to those who live in states that did not create their own insurance marketplaces under the landmark health-care law.
Critics of the president’s signature law, who have been relentless in trying to overturn it or slow it down, view the case of King v. Burwell (No. 14-114) as one of their best hopes for doing just that. A decision by the high court ending subsidies for participants in 34 states would seriously hobble the overall law, analysts say.
Substitute Teacher a Challenger
One of the four challengers in the King case is Brenda Levy, a 64-year-old substitute teacher from Richmond, Va. She averred in a 2013 court document that she expected to earn $43,000 in 2014, but with no workplace-based health insurance.
That income would exempt her from the ACA’s requirement to purchase health insurance—except for the fact that, under the contested Internal Revenue Service rule, the federal health-insurance exchange offers subsidies to residents of Virginia and the other states that have declined to establish their own exchanges.
“Absent any eligibility for federal subsidies, I would be exempt in 2014 from the individual mandate penalty,” Ms. Levy said in the 2013 legal declaration. “Thus, if I am eligible for a federal subsidy in 2014, I will be forced either to pay a tax penalty or to buy Affordable Care Act-compliant health coverage for 2014. … I do not want to purchase ACA-compliant health coverage in 2014.”
Ms. Levy and three other individuals are challenging the IRS rule in the King case. They argue that language in the healthcare law limits subsidies to those purchasing insurance through, as the law puts it, “exchanges established by the state.”
The U.S. Court of Appeals for the 4th Circuit, in Richmond, upheld the Obama administration’s interpretation that the ACA permits subsidies for those buying insurance through the federal HealthCare.gov exchange.
The case has attracted hundreds of pages of briefs from interested groups. But in recent weeks, some news outlets have raised questions about the legal standing of the four Virginia challengers, including Ms. Levy. Two of the other challengers are apparently Vietnam War veterans and potentially eligible for coverage and care from the U.S. Department of Veterans Affairs. A third challenger has faced questions about her residency in Virginia.
Meanwhile, The Wall Street Journal visited Ms. Levy at her Richmond home, where she told its reporters that she had little knowledge of the case and had been told by the lawsuit’s organizers not to discuss it. The paper quoted a spokesman for the Chesterfield County, Va., public schools as stating that Ms. Levy earned about $10,000 annually from her substitute teaching position there. If that were her total income, she would not be subject to a penalty for not purchasing insurance under the ACA.
It was unclear whether Ms. Levy’s projection of $43,000 in income for 2014 included additional sources of pay. She couldn’t be reached for comment.
Standing on the sidelines of the King case is a group of 39 Indiana school districts, which are pressing a separate lawsuit that challenges the IRS subsidy rule over its impact on employers.
The districts say that distribution of subsidies under the federal exchange in a state such as Indiana, which does not have its own exchange, triggers a provision of the ACA that requires employers with 50 or more workers to provide minimum coverage to those who work 30 or more hours a week, or else pay a penalty. The Indiana suit is on hold in the federal district court in Indianapolis because its outcome could be affected by how the Supreme Court rules in King, said W. James Hamilton, an Indianapolis lawyer representing the school districts. Along with the state of Indiana, the districts have filed a friend-of-the-court brief on the side of those challenging the law in the Supreme Court case.
Many of the Indiana districts have reduced the working hours of instructional aides, substitute teachers, cafeteria staff members, bus drivers, coaches, and others to fewer than 30 hours per week to avoid the penalties under the ACA’s so-called employer mandate.
Asked why Indiana school districts have been at the forefront of challenging the law’s application and not those in other states, Mr. Hamilton said, “Public schools in Indiana are a very well-connected, mobilized group. We want the problem fixed with this law, and we don’t care how it gets done.”
NEA Weighs In
On the other side, the National Education Association filed a friend-of-the-court brief in the King case in support of the ACA and the Obama administration’s subsidy rules.
“NEA’s members include many low-income education support professionals—such as school bus drivers who safely transport our children to and from school, janitors who clean our schools, and cafeteria workers who nourish our children,” the union’s brief says. “Many of these individuals have benefitted immensely from the ACA’s integrated scheme for expanding affordable coverage.”
In addition, the NEA says, the law is helping improve health care for children, and the challenger’s interpretation of the ACA’s language is mistaken.
Jason Walta, the NEA’s senior counsel, said the union is concerned that a few districts have reduced hours for some school personnel to avoid penalties, “but any concern we have about that doesn’t mean we want to see the ACA scuttled.”
