June 13, 2024

Health Insurance Exchange Contested by Six States

Posted by Judith Sterling
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Business owners from Kansas, Missouri, Tennessee, Texas, Virginia, and West Virginia initiated a class action federal lawsuit seeking to overturn a key part of the federal health reform law that they say oversteps the government’s authority, according to the Insurance & Financial Adviser News.The plaintiffs claim the mandate forcing businesses to offer health insurance plans that meet minimum requirements set up under the Affordable Care Act (ACA) goes beyond the scope of the law in states that are relying on the federal government to set up the exchanges.

Only 19 states are setting up their own online health insurance exchanges, which must be operational by Oct. 1 for open enrollment, so all Americans can have health insurance by Jan. 1, 2014, as mandated by the law.

The lawsuit, Halbig et al v Sebelius, pits Jacqueline Halbig, an Alexandria, Virginia, business owner, and 11 other individuals and companies against Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services.

Also named in the suit is the Secretary of the U.S. Department of the Treasury, Jacob Lew, and Steven Miller, acting commissioner of the Internal Revenue Service, and their respective agencies.

Halbig of Sovereign Global Solutions, a consortium of consultants dealing with international humanitarian aid and infrastructure development, is the former director of communications and senior policy advisor in HHS during the George W. Bush administration.

The plaintiffs contend that the IRS went beyond its legal authority as set up under ACA when it issued a rule allowing for refundable tax credits – subsidies – for individuals who buy their health insurance through an exchange.

The IRS rule provides for subsidies for those who purchase insurance through state-run exchanges as well as federal-run exchanges, but the lawsuit claims ACA only allows for subsidies when plans are purchased through state exchanges.

The case was filed in the District Court of Columbia.

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