King v. Burwell
Citation: 576 U.S. 473 (2015)
Facts
The ACA provided subsidies to individuals purchasing insurance on “an Exchange established by the State.” The IRS interpreted this to include federally established exchanges as well. Plaintiffs argued the text allowed subsidies only on state-established exchanges, which would have crippled the federal exchange and the ACA’s structure.
Issue
Does the IRS’s interpretation warrant Chevron deference, and if so, is it permissible? If not, what is the correct reading of the statute?
Holding
Chevron deference does not apply here because the question of subsidy eligibility is a major question of deep economic and political significance — such questions are presumed to be resolved by Congress, not agencies. Applying the ACA as a whole, subsidies are available on both state and federal exchanges.
Rule
Major questions doctrine (early articulation): When a question of great economic and political significance is at issue, the Court does not reflexively apply Chevron deference but instead asks whether Congress clearly delegated the question to the agency. Courts apply their own judgment to such major questions.
Significance
- Early articulation of the major questions doctrine, later confirmed as an independent canon in West Virginia v. EPA (2022)
- Preserved the ACA’s subsidy structure; a contrary ruling would have effectively ended the individual insurance market in 34 states
- Signals that Chevron deference has limits even where statutory ambiguity exists
- One of the precursors to the Court’s rollback of Chevron deference culminating in Loper Bright Enterprises v. Raimondo (2024)