Something happened abut two weeks ago.
It happen quietly, but it happened.
Oklahoma’s Attorney General, Scott Pruitt, claims that under the Patient Protection and Affordable Care act, employers face IRS penalties under circumstance not provided by the healthcare law.
The IRS rule states that an employer must provide coverage for 95% of employees and if just one employee uses a subsidy to buy coverage in either a state or federal exchange, the employer faces a $2000 penalty for each full time employee beyond the thirtieth employee.
The plaintiff maintains that the IRS does not have the right to impose the employer mandate in states that did not set up an exchange.
How are they making this claim?
Let’s read the law to know what’s in it.
Section 1311 specifically defines an exchange as a “governmental agency or nonprofit entity that is established by a state.”
It get’s better folks.
Section 1401 specifically states who is eligible for a federal subsidy. Only those who are ““enrolled … through an Exchange established by the State under 1311,” may receive this benefit.
Oklahoma claims since they did not establish a state exchange, something only 16 states are doing, they are not subject to the employer mandate.
A judge has ruled this lawsuit may proceed.
In a statement AG Pruit said:
We’re optimistic the court will recognize what states have known for months — that the IRS disregarded the law by making the large employer mandate effective in Oklahoma or in any of the 33 other states without a state health care exchange
I know with this administration’s penchant for ignoring laws it finds inconvenient, this is only a small ray of sunshine; but if the court rules that the employer mandate can only apply in states providing the exchanges and not states with federally created exchanges, Obamacare will effectively be defunded.
Stay tuned, the fight is not over.