Republicans File Lawsuit over Health Care Reform

On November 21, 2014, the Republican-controlled House of Representatives filed a lawsuit against the Department of Health and Human Services and the Department of Treasury and both Departments' Secretaries, in their official capacity.

The lawsuit alleges that the Administration of President Barack Obama ("Administration") essentially re-wrote the Affordable Care Act without legislative action by extending the implementation date of the employer mandate, as well as unilaterally changing the requirement that employers offer health insurance to all full time employees; and that the Administration has also made illegal payments to insurance companies.

The Complaint states that the lawsuit addresses fundamental issues regarding the limits of Executive power under the Constitution and the continued viability of the separation of powers doctrine, as well as the constitutional ban on the expenditure of any public funds by any branch of the federal government, including the Executive Branch, absent enactment of a law appropriating such funds.

The ACA states that the employer shared responsibility payments shall apply to months beginning after December 31, 2013, and shall be applicable to those employers who fail to offer affordable health insurance coverage to all of their full-time employees (and their dependents), yet the Treasury delayed implementation of the penalty twice and revised the requirement so that applicable large employers are only required to offer coverage to 70% of their full-time employees in 2015 and 95% in 2016.

The ACA also establishes a program by which the government is authorized to make direct payments to insurers to offset costs that insurers incur in providing cost-sharing reductions under the ACA to beneficiaries, but Congress has not appropriated any funds to make those payments to insurers.

The lawsuit requests the Court to declare that the payments to insurers violate the Constitution, and enjoin the Treasury Department and its Secretary from making any additional payments to insurers until a law appropriating funds for such payments is enacted; and to declare that the extension of the employer shared responsibility payments, as well as the revised requirement that coverage does not need to be offered to all full-time employees, is a violation of the Constitution.

If you have questions about this case, the ACA or other legal or business concerns related to the Affordable Care Act or health coverage issues, please call Attorney Jillian Jagling at 401.824.5100 or email jjagling@pldolaw.com. We welcome your comments, questions and suggestions.

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