Appeal from Human Services Board Charles A. Gingo, Chair
William H. Sorrell, Attorney General, Montpelier, and Seth A.
Steinzor, Assistant Attorney General, Waterbury, for
Christine Speidel, Springfield, and W. David Koeninger,
Bennington, Vermont Legal Aid, Inc., for Amicus Curiae Office
of the Health Care Advocate.
PRESENT: Reiber, C.J., Dooley, Skoglund, Robinson and Eaton,
1. The State appeals the Human Services Board's decision
reversing a determination by the Economic Services Division
of the Department for Children and Families (DCF) that J.H.
cannot be considered for a subsidized qualified healthcare
plan on the Vermont Health Connect exchange because she has
health insurance available to her through her husband's
employer. The appeal turns on the question of whether, under
controlling federal law, healthcare insurance must be
considered available to J.H. through her husband's
employer even though her husband elected not to enroll in his
employer's plan and she herself could not enroll in the
plan unless he did. We affirm the Board's ruling that
J.H. could be considered for a subsidized healthcare plan
through Vermont Health Connect, but we do so based on a
different rationale than that given by the Board.
2. Under the Patient Protection and Affordable Care Act of
2010 (Affordable Care Act), each and every "applicable
individual" is required to maintain "minimum
essential coverage" (MEC) for health care or pay a tax.
I.R.C. § 5000A(a)-(b). Individuals may obtain MEC
through government-sponsored or employer-sponsored healthcare
plans or through a state insurance exchange such as Vermont
Health Connect. Id. § 5000A(f)(1). Moreover,
individuals meeting certain criteria may obtain federal
subsidies to help them purchase insurance on an exchange.
Those subsidies consist of credits against income tax
liability, which are called advance premium tax credits
(APTC), and limits on out-of-pocket expenses for health care,
which are called cost-sharing reductions. See id.
§ 36B (creating tax credit for individuals with coverage
under qualified health plan); 42 U.S.C. § 18082
(establishing program for advance determination of premium
tax credits and cost-sharing reductions and for payment of
such subsidies to issuers of qualified healthcare plans on
behalf of eligible individuals). To receive the cost-sharing
reductions, an individual must be eligible for APTC. 45
C.F.R. § 155.305(g)(1)(i)(B). Similar state subsidies
may also be available to those eligible for federal premium
tax credits. See 33 V.S.A. § 1812 (setting forth
eligibility standards for state subsidies).
3. Federal regulations require state exchanges like Vermont
Health Connect to perform certain functions related to
eligibility, including determining, based on federally
prescribed standards, an individual's eligibility to
purchase a qualified healthcare plan through a state exchange
and to receive APTC and cost-sharing reductions. See 45
C.F.R. § 155.200(a) (requiring exchanges to perform
functions set forth in specified subparts of regulation
related to determining individual eligibility); 45 C.F.R.
§ 155.305(f)(5) ("The Exchange must calculate
advance payments of premium tax credit in accordance with
[Treas. Reg.] 1.36B-3."); see also 33 V.S.A. §
1805(6) (listing, as one of state exchange's duties,
determining premiums and subsidies required under federal
law). In Vermont, DCF's Economic Services Division
determines eligibility for enrollment in qualified healthcare
plans through Vermont Health Connect "in accordance with
applicable provisions of federal and state law and
regulations" pursuant to its Health Benefit Eligibility
and Enrollment Rules. Health Benefit Eligibility and
Enrollment Rule 2.05, Code of Vermont Rules 13 170 001
[hereinafter HBEE Rules],
4. The critical federal regulation in this case is Treasury
Regulation § 1.36B-2. Under that regulation, an
applicable taxpayer-defined as "a taxpayer whose
household income is at least 100 percent but not more than
400 percent of the Federal poverty line for the
taxpayer's family size for the taxable year"-may
obtain the federal subsidies if the taxpayer is enrolled in a
healthcare plan through an exchange and is not eligible for
MEC other than through the exchange. Treas. Reg. §
1.36B-2(a)-(b). In general, "an employee who may enroll
in an eligible employer-sponsored plan . . . and an
individual who may enroll in the plan because of a
relationship to the employee (a related individual) are
eligible for minimal essential coverage under the plan."
Id. § 1.36B-2(c)(3); HBEE Rule 23.01(c)(2)
(same). "An employee or related individual may be
eligible for minimum essential coverage under an eligible
employee-sponsored plan . . . if the employee or related
individual could have enrolled in the plan . . .
during an open or special enrollment period." Treas.
Reg. § 1.36B-2(c)(3)(iii) (emphasis added); HBEE Rule
5. Pursuant to these rules, if J.H. is eligible for MEC under
her husband's healthcare plan-meaning she "could
have enrolled" in the plan-she may not receive federal
or state subsidies through a Vermont Health Connect plan on
6. The salient facts in this case are undisputed. J.H.
previously received Medicaid through the Dr. Dynasaur program
but aged out of the program upon turning nineteen in 2013.
The State continued to provide her with coverage under the
program for two more years, however, due to an administrative
error. In October 2015, DCF notified J.H. that her Dr.
Dynasaur coverage would terminate at the end of that month
but that she could apply for coverage through Vermont Health
7. The following month, J.H. applied for healthcare coverage
on the exchange. She reported that she was newly married, had
a total gross household income of $36, 868, and that her
husband's employer offered healthcare insurance to him
and to her as a spouse. The coverage available under the
husband's employer-sponsored plan met the Affordable Care
Act's MEC standards. Under the plan's terms, J.H.
could not enroll in it unless her husband also enrolled.
8. J.H.'s husband, as an unadopted former foster child
over the age of eighteen, is eligible for Medicaid until he
reaches the age of twenty-six. HBEE Rule 9.02(2)(e). Persons
with this status are eligible for Medicaid regardless of the
amount of their household income. Id. Rule 9.03(e).
The husband could have enrolled in his employer-sponsored
plan, but he chose not to do so because he had available to
him premium-free Medicaid coverage.
9. Based on these facts, DCF's Economic Services Division
concluded that the husband's employer-sponsored plan was
available to both J.H. and her husband and that J.H. was
therefore ineligible to receive subsidies for insurance
purchased through Vermont Health Connect. J.H. appealed to
the Human Services Board, ...