Small Businesses Sue to Void Employer Mandate in Federal Exchange States

Comment: This suit, similar to one filed by the state of Oklahoma, is being coordinated by the Competitive Enterprise Institute. The statute and the legislative history are very clear: Obamacare subsidies cannot flow, and therefore the employer mandate does not apply, in the 33 or so states that have refused to set up their own exchanges. The IRS doesn’t have a legal leg to stand on.

“A group of small business owners and individuals in six states today are suing the federal government over an IRS regulation imposed under the Affordable Care Act (Obamacare), which will force them to pay exorbitant fines, cut back employees’ hours, or severely burden their businesses. Complaint can be viewed here.”

“The Affordable Care Act authorizes health insurance subsidies to qualifying individuals in states that created their own healthcare exchanges. Those subsidies trigger the employer mandate (a $2,000/employee penalty) and expose more people to the individual mandate.  But last spring, without authorization from Congress, the IRS vastly expanded those subsidies to cover states that refused to set up such exchanges.  Under the Act, businesses in these nonparticipating states should be free of the employer mandate, and the scope of the individual mandate should be reduced as well.  But because of the IRS rule, both mandates will be greatly enlarged in scope, depriving states of the power to protect their residents.”

Small Business Owners Sue Over IRS Obamacare Power Grab
May 2, 2013
Kristina Hernandez

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