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Roanoke Free Press
Friday, November 1, 2013

Cuccinelli set up the scenario for employers to sue over Obamacare mandate

Attorney General Ken Cuccinelli

Attorney General Ken Cuccinelli

Brian Gottstein, Director of Communications for Attorney General Ken Cuccinelli, sent out a press release from the Office of Attorney General applauding employers who are suing over the Obamacare employer mandate. “AG advocated for scenario that allowed employers to sue to avoid annual penalty.”

Cuccinelli is campaigning on his opposition to Obamacare and hopes to win over voters who are frustrated by the Affordable Healthcare Exchange website “glitches.” Also frustrated are those covered by individual health insurance policies. Those policies are being cancelled say policy holders.

The administration says these individual policies lack the minimum coverage required by ACA and coverage is being transitioned to more comprehensive healthcare plans.

As Cuccinelli states below Virginia opted to not form its own exchange. States (18 total) like Washington, California and Kentucky are running their own exchanges with success.

Kentucky Gov. Steve Beshear said of their exchange, “We’re incredibly proud of the continued success of Kynect, which has helped thousands of Kentuckians find affordable health coverage, many of them for the first time.”

Press Release:

RICHMOND (November 1, 2013) – Today, Attorney General Ken Cuccinelli applauded the efforts of employers in Virginia and elsewhere to challenge the Internal Revenue Service’s authority to assess Obamacare’s annual $2000 per employee “employer mandate” on organizations that don’t offer health insurance at the workplace. Employers have claimed in court that in states like Virginia, where the state health insurance exchange is run by the federal government instead of the state government, the Obamacare law does not give the IRS the authority to penalize them.

Cuccinelli had advised against — and Virginia opted out of — a state-run health insurance exchange under Obamacare.  A primary reason was to provide Virginia employers the opportunity to have a credible court defense if they decided not to pay the mandate.  

“If our employers can avoid this crushing new $2000 per employee annual federal penalty, that’s more money they can use to expand their businesses and create more jobs in the commonwealth. Even though the mandate has been postponed a year, in this economy, it would still be a job killer to assess such a heavy-handed tax on Virginia businesses,” said Cuccinelli.

Under Obamacare, also known as the Affordable Care Act (ACA), businesses that employ 50 or more workers and that don’t offer them health insurance will face the annual per employee penalty.  Their employees can instead obtain health insurance through an online exchange, also known as a marketplace.  Exchanges are either run by the state or federal government.  The federal government set up exchanges in states that chose not to create their own.

However, the ACA makes clear that employers can only be penalized if their employees obtain health insurance through a STATE-RUN exchange. The law does not allow the penalty to be assessed in states where the exchange is run by the federal government, such as in Virginia.

To get around this, the IRS said it will ignore the plain language of the ACA and will proceed with penalizing employers whose workers get their insurance from a federally run exchange.

Last week, a federal court in Washington, D.C., denied the federal government’s motion to dismiss the case of Halbig v. Sebelius, a lawsuit that seeks to force the federal government to live up to the law as written.  A case in Virginia, King v. Sebelius, is pending in federal court in Richmond.

“The federal court’s ruling in Halbig clears the way for a full hearing in the case, where the IRS will have to explain its decision to ignore the plain words of the law,” said Cuccinelli. “It’s ironic that President Obama and his supporters repeatedly say that Obamacare is the law of the land and can’t be changed, yet they keep wanting to unlawfully change the law to their liking and refuse to enforce it as it was actually passed.  We wish the challengers in Halbig, King, and similar cases the best of luck.”

To properly allow the IRS to assess the employer mandate in states with federally run exchanges, Congress would have to amend the ACA by passing new legislation.

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