acaYou’ve likely seen the news lately regarding King vs. Burwell, the latest case in front of the Supreme Court that could decide the future of the current healthcare law. This is a quick summary of the case and what its three possible outcomes could mean, which is expected to be announced on Thursday, June 25.

The What: In King vs. Burwell, the court will decide if tax subsidies are being provided unlawfully in three dozen states that have decided not to run the marketplaces for insurance coverage. Why? The wording in the Affordable Care Act says that subsidies are available only to people living where the insurance exchanges had been “established by the state,” which leaves room for interpretation that providing subsidies on state-run exchanges as well as Federal exchanges exceeded the authority Congress granted, according to the challengers.

The Who: Depending on the outcome, this may affect 5 million to 8.2 million low to moderate income taxpayers who are eligible for a subsidy that live in states where there is no state exchange.

Possible Outcomes: There are three possible outcomes from the ruling:

Outcome A — in favor of Burwell: If the Supreme Court rules in favor of Burwell, taxpayers who have insurance through the Federal marketplace will not lose their subsidies now or in the future. This outcome means that everything stays the same as it has been.

Outcome B — in favor of King: If the Supreme Court rules in favor of King, taxpayers who have insurance through the Federal marketplace will lose their subsidies, both past and present. This means that anyone who has received a subsidy for insurance will need to reconcile their tax returns with the IRS and they will likely owe that money back.

Outcome C — in favor of King, moving forward: The third option is the Supreme Court can rule in favor of King moving forward but overturn repayment on any subsidies awarded to taxpayers for health insurance in the past and current tax year. What does this mean? It means this year’s tax returns will stay the same but qualifying for affordable health insurance in the future will be a bit more costly without government aide in 34 states.

If the court rules the subsidies are invalid (outcomes B and C), Congress can still step in and offer a one-sentence provision. So this will be a major Supreme Court decision.

D’Avolio, M. (2015) Above The Forms: King vs. Burwell And What It Means For Your Clients. Retrieved from

As a CPA, Accredited Small Business Consultant and Advanced Certified QuickBooks ProAdvisor, we mentor small business owners to empower them with the knowledge and skills to run a successful business. Allow us to evaluate your small business needs. Give us a call today at (727) 391-7373 or visit us at and