A case decided by the Vermont Supreme Court earlier this month will serve as an important precedent for some Vermonters hoping to buy subsidized health insurance through Vermont Health Connect.A woman identified in court records as J.H. bought insurance on Vermont Health Connect last year.
She was expecting a subsidy to help with the cost of the insurance, but the state denied her request. They said she didn't qualify for a subsidy because she already had access to health insurance.
But she didn't have access to health insurance.
“So, J.H. was denied subsidies because her husband had access to health insurance through his employer,” said Christine Speidel, a staff attorney at Vermont Legal Aid who represented J.H. in the case.
But J.H.'s husband wasn't using his employer's health plan, and because of that, J.H. couldn't use it either.
J.H.'s husband grew up as a foster child, and as a result he was able to stay on his free Medicaid plan until the age of 26.
And his employer's plan doesn't allow spouses to join their health insurance if the employee isn't enrolled.
J.H.'s household approached the situation like this: Her husband would stay on his free Medicaid plan until he was 26, and she would sign up for a subsidized plan on Vermont Health Connect. That way, instead of paying for two plans with no subsidy through her husband's employer, J.H. would pay towards a subsidized plan and her husband wouldn't have to pay at all.
But the state said subsidies are only available if you don't have any other options for health insurance, and the offer from J.H.'s husband's employer counted as an option for J.H., even though she could only sign up if her husband did.
“So the question was: Does that offer of insurance to her husband – which the husband didn't take, for his own reasons – does that disqualify J.H. from getting subsidized health insurance through Vermont Health Connect?” Speidel said.
The state Supreme Court answered that question this month, and ruled in J.H.'s favor.
The court's ruling essentially said that since J.H. can't sign up through her husband's employer unless he does, and since there's no legal mechanism for someone to force their spouse to buy a certain health care plan, then she doesn't have access to an employer-sponsored plan, so she does qualify for a subsidy.
It's not clear how many Vermonters were in this position, but Speidel said it could include the spouses of military veterans and other former foster children.
It's easy to think of the state as the bad guy in this story, but this wasn't the state's rule.
“The state was trying to follow as best it could federal directives as to how the program is to operate,” said Seth Steinzor, the assistant attorney general who represented the state.
And the subsidy J.H. wanted is made up of federal money, so the state has to be careful not to award any of that money to people who don't meet the federal qualifications.
“If a person is incorrectly awarded subsidies, and the IRS decides that the state incorrectly awarded the person subsidies, then the IRS may recover that money,” Steinzor said.
So by denying the subsidy request they weren't sure about, the state was trying to make sure Vermonters don't budget for a subsidized health plan only to get an extra fat tax bill at the end of the year.
Now that the Supreme Court has weighed in, J.H. and other spouses in her position can get subsidies through Vermont Health Connect.
