WASHINGTON (AP) — A federal judge has dismissed a challenge to part of the new health care law, ruling that the IRS may provide tax credits to residents of states that have declined to establish their own health insurance exchanges.
U.S. District Judge Paul Friedman said the IRS regulation enabling people to buy competitively priced health insurance is consistent with the purpose of the Affordable Care Act.
Some employers who filed suit argued that the law authorizes tax credits only for people who buy coverage through state-run exchanges.
Friedman said there is no evidence that Congress intended to condition tax credits on whether a state ran its exchange. The federal government is running exchanges in 36 states that did not set up their own.
The employers who filed the lawsuit plan to appeal.