King v. Burwell

Whether the Affordable Care Act (“ACA”) creates rule-making authority permitting the IRS to grant tax credit subsidies to taxpayers who have purchased health insurance plans through health insurance exchanges established by either states or the federal government.

Petitioner alleged that the IRS exceeded its authority under the Administrative Procedure Act (“APA”) when it promulgated a final rule interpreting § 1311 of the Affordable Care Act (“ACA”), 42 U.S.C. § 18031, which grants tax credit subsidies to taxpayers who have purchased health insurance plans purchased through health insurance exchanges established by either states or the federal government. § 1311 only refers to state-run exchanges, but the district court upheld the IRS rule-making was permissible under the APA and the Chevron Doctrine. The Fourth Circuit affirmed.

The Supreme Court granted certiorari to resolve the issue of whether the IRS can create rules to extend tax-credits. Petitioner argued the circuits are split and the Fourth Circuit erred in finding ambiguity and deferring to the IRS.