VII. Key Issues: Regulation & Reform >> C. Health Reform >> Affordable Care Act (ACA) >> ACA Repeal >> Pending Legal/Constitutional Challenges (last updated 2.19.16)
- 1 Overview
- 2 Employer Mandate
- 3 Individual Mandate–Cutler v. United States Department of Health and Human Services (D.C. Circuit Court of Appeals)
- 4 U.S. House of Representatives v. Burwell (U.S. District Court, District of Columbia)
- 5 Extension of Cancelled Plans
- 6 Contraception Mandate
- 7 Congressional Exemption–Johnson and Ericson v. Office of Personnel Management (Seventh Circuit Court of Appeals)
- 8 State Payment of Health Insurance Tax–States of Texas, Kansas and Lousiana v. DHHS (District Court, Northern District of Texas, Wichita Falls Division)
- 9 State Health Plan Reinsurance Payments–State of Ohio v. United States (U.S. District Court, Southern District of Ohio, Eastern Division)
- 10 Medicaid Coercion–Scott v. HHS (U.S. District Court, Northern District of Florida, Pensacola Division)
As of January 20, 2016, there are 11 major cases in the pipeline, most having cleared preliminary hurdles to being heard on their merits (details). In 2 cases, U.S. appeals courts have ruled against plaintiffs and a decision is being made about whether to petition the Supreme Court for review.
- Employer Mandate
- Individual Mandate–Cutler v. U.S. DHHS (D.C. Circuit Court of Appeals)
- U.S. House of Representatives v. Burwell (U.S. District Court, District of Columbia)
- Extension of Cancelled Plans
- State of West Virginia Ex Rel. Patrick Morrissey v. DHHS (U.S. District Court, District of Columbia)
- American Freedom Law Center v. Obama (D.C. Circuit Court of Appeals)
- Contraception Mandate–Seven Cases (U.S. Supreme Court)
- Congressional Exemption–Johnson and Ericson v. Office of Personnel Management (Seventh Circuit Court of Appeals)
- State Health Plan Payment of Health Insurance Tax–State of Ohio v. U.S. DHHS (U.S. District Court, Southern District of Ohio, Eastern Division)
- Medicaid Coercion–Scott v. HHS (U.S. District Court, Northern District of Florida, Pensacola Division)
Each of these court cases raise constitutional or significant legal questions. They are listed in approximate order of the extent to which a ruling against the administration has the potential to significantly disrupt implementation of the law.
State of Indiana v. Internal Revenue Service (U.S. District Court, Southern District of Indiana)
Summary. On October 8, 2013, Indiana State Attorney General Greg Zoeller, joined by 15 public school districts, filed a suit challenging the employer mandate on grounds that it imposes an unconstitutional tax on sovereign states. Because the penalty for employers not providing at least 95% of workers with health coverage could greatly exceed the actual cost of providing excluded workers with subsidized exchange coverage, Indiana argues that the mandate amounts to a punitive tax designed to force public employers to cover their workers.
Current Status. Another 24 school districts joined the case on December 9, 2013. On 10.9.14, the State et al. v. IRS case was argued before U.S. District Court Judge William Lawrence, but the case has been stayed since then pending the Supreme Court ruling in King v. Burwell, which impacted which portions of the Indiana case can move forward. In light of the 6.25.15 ruling in that case, the Attorney General’s Office planned to ask the U.S. District Court to schedule State et al. v. IRS case for additional proceedings. The King v. Burwell ruling still leaves unresolved the question of whether government employers can be subject to tax penalties in violation of intergovernmental tax immunity.
Prospects. An earlier challenge to the employer mandate on 10th amendment grounds was rejected by Judge Roger Vinson even though he later ruled the ACA’s individual mandate was unconstitutional. Washington and Lee law professor Timothy Jost is dubious about Indiana’s chances of success given that it was a plaintiff in the earlier employer mandate challenge that was dismissed.
Documents. Complaint filed October 8, 2013.
Hotze v. Burwell (Fifth Circuit Court of Appeals)
Summary. This case, filed in May 2013, challenged the constitutionality of the employer mandate. The Fifth Amendment prohibits the government from taking private property for public use without “just compensation.” Steve Hotze, a doctor in Texas, is arguing that Obamacare violates this “takings clause” by mandating that his business give money to another business, specifically an insurance company, without any compensation. The suit also argues that the law violates the Origination Clause and the Tenth Amendment (because it is not a constitutional tax).
Current Status. According to a Morning Beacon contributor (2.13.14): “A district court in Texas ruled against Hotze on January 10, 2014 by calling the Obamacare business mandate a tax and not a ‘taking’ under the Fifth Amendment. The judge based her decision on the Supreme Court’s ruling in 2012, which characterized the individual mandate as a tax.” The Fifth Circuit Court of Appeals subsequently ruled on 4.24.15 that a) Hotze lacked standing to challenge the individual mandate on grounds he had showed no injury; b) the challenge to the employer mandate was barred by the Anti-Injunction Act (which prohibits suits against collection of taxes); and c) the district court lacked subject-matter jurisdiction to entertain an Origination Clause challenge; accordingly the court vacated the district court’s judgment and remanded it to that court with instructions to dismiss the complaint for lack of jurisdiction.
Prospects. In a companion case, AAPS v. Sebelius, Supreme Court Chief Justice Roberts denied an appeal without comment on January 6, 2014. On June 8, 2015, the plaintiffs sought en banc review by the full Fifth Circuit, which was denied on August 17. The plaintiffs have 90 days from the en banc denial to petition the Supreme Court for review of the Fifth Circuit’s decision.
Documents. All documents related to case are here.
Kawa Orthodontics v. Lew (Supreme Court Review Requested)
Summary. Plaintiff challenged the delay of the employer mandate. Kawa had argued that he wasted money on lawyers’ fees and other expenses in preparation for compliance with the mandate. Kawa said that by the time the delay was announced, he had already incurred expenses preparing for implementation of the provision. His suit claimed that the ACA didn’t give the IRS or the Treasury the authority to delay portions of the law, and that they thus violated the Administrative Procedure Act.
Current Status. A divided panel of the Eleventh Circuit held that the plaintiff had not shown that it was injured by the delay or that an injunction could resolve any injury. The suit was dismissed without prejudice because the court found a lack of subject matter jurisdiction and thus could not make a judgment on the merits. The Eleventh Circuit rejected a rehearing by the full circuit. The plaintiffs have requested Supreme Court review.
Individual Mandate–Cutler v. United States Department of Health and Human Services (D.C. Circuit Court of Appeals)
Summary. On December 31, 2013, according to Wikipedia, Jeffrey Cutler, a Pennsylvania township official, filed a suit “challenging the constitutionality of the Act, both on its face and as applied to him and his constituents. Cutler asserts that the provision requiring individuals to obtain health insurance coverage or face monetary penalties violates the religion clause of the First Amendment to the United States Constitution and a previous Supreme Court Decision , “1947 Everson v Board of Education”, and allows the government to favor one religion over another religion. The process of empowering the United States Government to Certify that applicable individual is part of EXEMPT RELIGION or SECT, Cutler seeks a declaration that the Act is unconstitutional, invalid, and unenforceable. Cutler also seeks to “rollback” the law to the status it had prior to 2014 on various grounds, arguing that under newly issued rules, the law now violates the Fourteenth Amendment by allowing unequal protection under the law.(If You Like Your Plan, You Can Keep Your Plan till October 1, 2016, but only if the insurance commissioner of your state agrees.”
Current Status. According to Timothy Jost (6.23.15), Cutler’s claim was dismissed by the district court on standing grounds, as the plaintiffs had not shown an injury. The case is now on appeal to the D.C. Circuit.
Prospects. Although it does not affect this case, legal scholar Jonathan Adler has noted that “The characterization of the mandate’s penalty as a tax has other legal implications that could also end up in court. One reason the penalty functioned as a tax, Chief Justice Roberts explained, is that it was small enough to leave covered individuals with a meaningful choice — but this also means the mandate cannot serve its intended purpose of inducing more people to obtain health coverage. A larger tax, however, would begin to look like a “penalty” and exceed the scope of the federal government’s regulatory authority. Thus, should Congress ever seek to increase the mandate’s tax penalty, more litigation would certainly follow.”
Documents. Documents are available on PACER (subscription required).
U.S. House of Representatives v. Burwell (U.S. District Court, District of Columbia)
Summary. House Republicans filed their suit in the D.C. district court (11.21.14). Two issues are at stake.
- Cost Sharing Subsidies. According to Wall Street Journal, “one focus is an authorization that the government pay back insurers for discounts they are required to offer low-income enrollees. The House lawsuit alleges that while that program was authorized by the law, Congress never appropriated money to pay for it.”
- Delay of Employer Mandate. According to Wall Street Journal, the complaint also claims the administration acted illegally when it twice delayed enforcement of the requirement that large employers [50 or more employees] “offer coverage to workers or pay a penalty.” In July 2013, the administration deferred this mandate until 2015. Seven months later, the administration announced a further delay, until 2016, for employers with 50 to 99 employees.
Arguments for Plaintiff.
- General Argument. In The Case for Suing the President, David B. Rivkin Jr. and Elizabeth Price Foley summarize the general justification for this suit:
- “A president who unilaterally rewrites a bad or unworkable law, however, prevents the American people from knowing whether Congress should be praised or condemned for passing it. Such unconstitutional actions can be used to avert electoral pain for the president and his allies. If Mr. Obama can get away with this, his successors will be tempted to follow suit. A Republican president, for example, might unilaterally get the Internal Revenue Service to waive collection of the capital-gains tax. Congress will be bypassed, rendering it increasingly irrelevant, and disfranchising the American people.”
- “Litigation in federal court is an indispensable way to protect all branches of government against encroachment on their authority. States have successfully sued to stop federal intrusions into their constitutionally reserved powers. State legislators have also successfully sued to protect their institutional authority when state executives nullified their legislative power. The executive branch is no different.”
- Standing to Sue. Constitutional expert James Blumstein at Vanderbilt Law School has asserted: “There are many reasons for courts to avoid getting sucked into disputes like this. But if Congress ever has standing to raise an institutional claim, this is one of the best issues on which to do it, because the power to control spending through appropriations is an institutional prerogative of Congress under the Constitution.”
- Cost Sharing Subsidies. The specific justification for the challenge to the cost-sharing subsidies lies in the constitutional provision “No money shall be drawn from the Treasury, but in consequence of appropriations made by law.”
- No Appropriations Ever Made. According to NY Times (11.30.14), President Obama originally requested funds as part of the budget he sent Congress in April 2013, but Congress never acted on that request. “In a report last year, the nonpartisan Congressional Research Service said it appeared that there was no appropriation for cost-sharing subsidies, in contrast to the tax credits, for which Congress has provided a “permanent appropriation.”
- How Cost Sharing Subsidies Are Currently Financed. Since the subsidies were viewed as essential, the administration began making the payments early in 2014, using funds from a separate account established for tax refunds and tax credits. In contrast, “Congress provided an open-ended appropriation for tax refunds more than 30 years ago, and in the health care law it said the money could be used for tax credits that subsidize insurance premiums.” This provides a legal basis for funding the $855 billion in premium subsidies over the next 10 years, but the equivalent rationale cannot be used for the cost-sharing subsidies. Nevertheless, “Sylvia Mathews Burwell, the secretary of health and human services, who was previously the White House budget director, said officials were using the same account for both types of assistance “to improve the efficiency in the administration of subsidy payments” under the health care law.”
- Antideficiency Act. According to NY Times (11.30.14), “under a law known as the Antideficiency Act, federal employees are subject to civil and criminal penalties if they spend money in excess of appropriations. Agencies report 10 to 20 violations a year. Under another law, public funds can be used only for the purposes specified by Congress in appropriations.”
Arguments Against Plaintiff
- Standing to Sue. According to NY Times (11.30.14), “Republicans face a significant hurdle in getting a court to rule on their lawsuit. They must first show that they have standing to challenge the administration’s action. Courts often refrain from getting involved in disputes between Congress and the executive branch. Some judges have agreed to consider cases in which a house of Congress explicitly authorized a lawsuit claiming an “institutional injury.”
- Cost Sharing Subsidies. According to Timothy Jost: “The House argues that it has not explicitly appropriated funding for the cost-sharing reductions and that the Constitution prohibits the expenditure of public funds without an explicit appropriation. The administration, however, relies on Chief Justice John Roberts’s admonition in King that “A fair reading of legislation demands a fair understanding of the legislative plan.”1 The ACA links the cost-sharing reduction payments, through an integrated legislative plan, to the premium tax credits, for which Congress has indisputably provided a permanent appropriation. Thus, the administration contends, no additional annual appropriation is needed.”
- Funds Have Already Been Appropriated. Salon’s Jordan Weissmann explains that “the House Republicans’ argument might be a lot more feeble than it looks, as David Super, a Georgetown University law professor, explained to me. By passing the Affordable Care Act and instructing the administration to pay insurers their subsidies, Super said, Congress effectively appropriated the funds to do it. ‘The Supreme Court has been very clear that you do not have to have a law that says Appropriations across the top. You just need a law directing that the money be spent,’ he said.”
- Congress Can Block Subsidies Through Legislation. According to The Hill, the administration argued in July that Congress “has brought this unprecedented suit, asking this Court to violate the separation of powers by wading into a dispute between the political Branches over the interpretation of the ACA and Section 1324, and to do for the House what the House will not use its legislative authority to do for itself.”
- Congress Understood the Legality of the Subsidies. The Hill reports that administration officials contend Congress ”even passed a bill, the No Subsidies Without Verification Act, that was premised on the idea that the funds were available.”
- 7.30.14. The House approved a resolution (H.Res. 676) authorizing Speaker John Boehner, on behalf of the House, to sue the President or other executive branch officials for failing to “to act in a manner consistent with [their] duties under the Constitution and laws of the
United States with respect to implementation of the [ACA]” (p. 4).
- 9.19.14. According to Politico.com, the House on 9.19 replaced its lawyers after the previous attorney pulled out, citing pressure from other clients for the political nature of the suit, according to House staffers.
- 11.21.14. House Republicans filed their suit in the D.C. district court. According to Wall Street Journal, “two law firms dropped the case before Republicans this past week tapped Jonathan Turley, a George Washington University law professor who has criticized both the Obama and Bush administrations for what he considers executive overreach.”
- 9.9.15. Judge Rosemary Collyer of the U.S. District Court for the District of Columbia refused to dismiss the House’s challenge to cost-sharing reductions (she dismissed the challenge to the employer-mandate delay, on grounds that she had no jurisdiction over a routine disagreement over the interpretation of a law).
- 1.20.16. House Republican committee chairmen subpoenaed Treasury Secretary Jack Lew for documents related to the payments. “The lawmakers are issuing the subpoena after repeatedly requesting the information throughout 2015 but being rebuffed by the administration. The administration pointed out that the ObamaCare payments in question are currently the subject of a lawsuit filed by House Republicans against the administration, and providing the documents could ‘compromise’ the litigation.” The subpoena for Lew commands that he appear before Congress on Feb. 3, 2016, to produce the documents.
Current Status. According to Timothy Jost, “Given the importance of the constitutional issues raised by the case and the fact that Collyer admitted that her decision was unprecedented, the government asked her to allow an interlocutory appeal to the U.S. Court of Appeals for the District of Columbia Circuit to decide the constitutional jurisdictional question before she examined the merits of the case.
- On October 19, 2015, Collyer denied their request, holding that the case would proceed more quickly if she decided the merits first.” She will decide the case in spring 2016. “If she decides against the administration, her decision will certainly be appealed, perhaps ultimately to the Supreme Court.”
- According to Sara Rosenbaum, it “could take years” for the D.C. Circuit Court of Appeals, and ultimately the United States Supreme Court (should it choose to do so), to review Collyer’s decision.
- According to Nicholas Bagley 2.12.16, “The government has requested oral argument in the case, but a hearing date has yet to be scheduled.” The court will issue an opinion “presumably about a month or so after a hearing date.”
- PolitiFact.com (8.1.14) reports “the House as a whole has never sued the president. However, individual lawmakers and groups of lawmakers have sued the president in the past. In fact, we found at least 14 instances in the last four decades alone.” According to Wall Street Journal, “The unusual lawsuit likely faces preliminary hurdles. U.S. District Judge Rosemary M. Collyer, who was nominated by President George W. Bush in 2002, will have to consider whether the House has the legal right, or standing, to sue the administration. Even if it does, legal doctrine holds courts are inappropriate venues to resolve certain “political questions” better left to the democratic rough and tumble. Moreover, unlike private parties, Congress has its own constitutional process for punishing a president it believes has egregiously transgressed: impeachment.”
- The Hill points out that Federal Judge Federal District Judge Rosemary Collyer appeared skeptical of the administration’s position in a May, 2015, preliminary hearing to determine if the House had legal standing. “‘I want to know where you find the appropriation,’ Collyer pressed the administration.”
- Budgetary Impact. According to Timothy Jost, these subsidies will cost $5 billion in 2015 and $136 billion over the next 10 years.
- Number of Enrollees Affected.
- Timothy Jost asserts: “Were the House to succeed in this claim, the consequences would be nearly as devastating as those that could follow from King v. Burwell. Nearly 60 percent [56%, 5.6 million] of enrollees in qualified health plans through the marketplaces are the beneficiaries of cost-sharing reduction payments, which make health care as well as health insurance affordable by reducing deductibles, coinsurance, copayments, and out-of-pocket limits for lower-income enrollees.”
- ACA enrollment expert Charles Gaba notes that “unlike King v. Burwell, which ‘only’ would have directly injured 6.5 million people across 34 states, if successful, this lawsuit would threaten CSR assistance for millions of enrollees in every state. However, due to the lower income range eligible for CSR (up to 250% FPL vs. 400%) and the limitation to Silver plans (vs. every metal level), the actual number of people impacted would still be lower: Around 5.85 million people as of March (likely slightly higher now…perhaps 5.9 million as of today). Then again, assuming it does end up snaking it’s way up to the SCOTUS by next spring or summer, and assuming total exchange enrollment increases from the current 10.3 million by, say, 20% to around 12.4 million or so, that number could be as high as 7.1 million people by then. Even worse, in King v. Burwell, you could at least plausibly argue that a small portion of the 6.5 million directly impacted (perhaps a few hundred thousand at the upper end of the subsidy range) wouldn’t have been directly hit too badly, since they’re receiving much smaller credits against (relatively) larger incomes. If the CSR assistance is removed, pretty much everyone impacted would be seriously screwed, since it’s only available to people making less than 250% FPL anyway.”
- Impact on Insurance Market. According to Nicholas Bagley 2.12.16, “As I explain here, insurers will likely be able to file lawsuits in the Court of Federal Claims to recoup what they’re owed. But that’ll take time and recovery isn’t guaranteed. In the meantime, the ACA will still require insurers to give a cost-sharing break to their low-income customers. The federal government won’t be able to pay insurers back, however, which will force insurers to raise premiums on all their customers to cover the shortfall.”
- Urban Institute (1.16). Nicholas Bagley summarizes: “The Urban Institute recently released a study by Linda Blumberg and Matthew Buettgens—highlighted prominently in the administration’s brief—that does just that. The study is carefully hedged; there’s loads of uncertainty here, and Urban doesn’t factor in the possibility of recovering the money through litigation. Still, the top-line figures are arresting. Under Urban’s model, premiums for a silver plan would increase, on average, by $1,040 per person. Cost-sharing subsidies would end, but premium subsidies would go up, yielding $3.6 billion in increased federal outlays each year. Yup, that’s right. If the House wins, it’ll increase federal spending by billions of dollars.”
- Sara Rosenbaum (9.24.15): “Without cost-sharing assistance, several things could happen to the 5.5 million people who, as of June 2015, received help. (About 2 million more would qualify for subsidies were they to choose a silver plan). First, the cost of care would rise—a lot—which in turn could lead many enrollees with less costly health needs to drop their plans. This would have the effect of skewing the marketplaces’ risk pool toward the sickest people, thereby raising premiums for everyone. Second, because insurers that participate in the marketplaces are legally obligated to provide cost-sharing assistance, they could suffer significant financial losses or decide to exit the marketplaces entirely, leading to major erosion of state insurance markets.”
- Legal Impact.
- Timothy Jost warns: “[Collyer’s] decision, however, raises the possibility — indeed the likelihood, given existing precedents — that the Court of Appeals may later find that Collyer herself violated the Constitution by deciding a case that the Constitution prohibits her from hearing.”
- Threat of More Litigation. According to Salon’s Jordan Weissmann, “If the administration did lose at court, insurers would still be entitled to their subsidy payments under the law. Therefore, they could simply file their own suit against the federal government at the Court of Federal Claims and collect the money owed to them.”
Extension of Cancelled Plans
State of West Virginia Ex Rel. Patrick Morrissey v. DHHS (D.C. Circuit Court of Appeals)
Summary. Due to public outcries over millions of cancelled health plans in fall 2013, the president announced an administrative fix to allow insurance companies through the end of 2014 to renew health insurance policies that don’t meet Obamacare’s standards — but only if as state insurance officials approve such extensions. In March 2014, the Obama administration extended this administrative for another two years by barring DHHS from enforcing new requirements on insurance plans until October 2016. “West Virginia claims that the policy unconstitutionally imposes on states an obligation to enforce provisions of the ACA that should be enforced by the federal government and is otherwise unlawful” (Timothy Jost, 6.23.15). According to the plaintiff, “Adopted without any advance notice or opportunity for public comment, the Administrative Fix unilaterally suspends federal enforcement of the ACA against individual plans made illegal by the ACA and fundamentally transforms what Congress intended to be a regime of “cooperative federalism.”
Current Status. On 7.29.14, Republican Attorney General Patrick Morrisey filed a complaint against the administration arguing that this administrative fix violates the Tenth Amendment because “abdicated its enforcement role and left the states solely responsible — and accountable — for deciding whether federal law would be enforced.” Briefs were filed 9.16.14. As of 6.23.15, the case is pending in the federal D.C. district court awaiting decision (Timothy Jost, 6.23.15). On 10.30.15, the district court rejected the suit on grounds that West Virginia lacked standing to sue. On 11.6.15, the state appealed the case to the D.C. Circuit Court of Appeals.
Prospects. According to Law360, “the state’s contention that the federal government had “conscripted” it into enforcing the law when the U.S. Department of Health and Human Services issued an administrative fix that extended a deadline for insurance policies to meet ACA requirements, and that the law was causing political blowback to state officials, wasn’t enough to grant West Virginia standing to sue, U.S. District Judge Amit P. Mehta found in Friday’s order. West Virginia isn’t claiming in its suit that the rule caused it financial injury, or that it was forced by the state to take a specific action, the judge said. Nor is the state contending it brought suit on behalf of its citizens to protect their interests, the judge said.” It remains to be seen whether the appeals court concurs with this view.
American Freedom Law Center v. Obama (D.C. Circuit Court of Appeals)
Summary. “This case challenged the administration’s transition policy — which allows individuals to maintain health plans that are not compliant with all ACA requirements — and the hardship exemption to the individual mandate that the agencies created for individuals who lost affordable coverage because of the enforcement of the 2014 health insurance reforms” (Timothy Jost, 6.23.15). The lawsuit alleges: “By executive fiat, [Obama and his executive agencies] altered the requirements of the Affordable Care Act and thus established with an unconstitutional and illegal claim of executive authority that otherwise-prohibited conduct—in particular, maintaining non-compliant health care plans—will not violate the Act, in direct violation of the separation of powers set forth in the United States Constitution.”
Current Status. The district court threw the case out because the plaintiffs could not show that they had been injured by the administration’s action and thus lacked standing. As of 6.23.15, it was on appeal to the D.C. Circuit (Timothy Jost, 6.23.15).
Prospects. In the 2014 term, the Supreme Court in Utility Air Regulatory Group v. EPA, made clear that “[t]he power of executing the laws necessarily includes both authority and responsibility to resolve some questions left open by Congress that arise during the law’s administration. But it does not include a power to revise clear statutory terms that turn out not to work in practice.” But it remains to be seen whether the D.C. Circuit court will overrule the finding that plaintiff lacks standing to sue.
As summarized by Health Care Lawsuits blog: “In August 2011, the Department of Health and Human Services issued a mandate that, as part of the Affordable Care Act’s requirements for minimum essential coverage, Women’s Preventative Care would include comprehensive coverage for all FDA-approved methods of contraception. This mandate also includes coverage for emergency contraception and sterilization services. Many religious and conscientious objectors oppose the mandate, especially because employers will be forced to pay for the coverage of these drugs and procedures for their employees, even if employers morally object. Employers who are not in compliance with the mandate can face fines of $100 per worker per day. ”
Health Care Lawsuits lists several different blog pieces about these cases. See also HHS Contraceptives Mandate Policy Focus and HHS Contraceptives Mandate Fact Sheet. The Beckett Fund for Religious Liberty maintains a complete score card, current updates, resources, and details on all 100 cases related to the HHS mandates (which collectively involve over 300 plaintiffs):
- 49 for-profit lawsuits have been filed over the HHS mandate. As of 11.6.15, 1 case has been dismissed on procedural grounds. Of the 45 for-profit plaintiffs that have obtained rulings touching on the merits of their claims against the Mandate, 3 have gotten temporary injunctive relief, 44 have secured injunctive relief against it, while 1 had an injunction denied, and 1 case was dismissed on procedural grounds, for a current score of 47-2.
- 56 non-profit lawsuits involving 140 plaintiffs have been filed against Secretary Burwell over the HHS mandate. This includes lawsuits by religious organizations such as hospitals, religious charities (40), religious colleges (37), and Catholic dioceses (15). As of 11.6.15, 9 cases have been dismissed on procedural grounds. 22 have secured injunctive relief, while 10 have had their injunction denied for a current score of 22-10. Seven cases have appealed to the Supreme Court; of these 5 so far have been granted orders protecting the ministries.
Seven Cases Under Supreme Court Review
According to SCOTUSBlog (10.23.15), “The Court is currently facing seven petitions for certiorari from four separate decisions by four different circuits, each of which rejected challenges to the Obama administration’s plan to accommodate objections to the birth-control mandate. However, the Eighth Circuit recently weighed in to invalidate the plan to accommodate those objections, creating the kind of clear conflict among the federal appeals courts for which the Justices look in deciding whether to take up a legal question.”
Summary. As summarized by SCOTUSBlog (10.23.15), “The regulations allowed religious non-profits to opt out of providing contraceptive coverage for their employees. When a group opts out, coverage for birth control for its female employees is provided directly by the insurer rather than through the employer’s policy; for groups that self-insure, the coverage is handled by a third party. Religious organizations now can opt out of the birth-control coverage by either submitting the federal form or sending a letter to federal officials. A broad range of religious non-profits, from religious organizations that provide social services and charitable work to private colleges and universities with religious affiliations, have challenged this opt-out system. Their argument is essentially that, although they are opposed to contraception for religious reasons, they must nonetheless take some step — notifying either their insurer or federal authorities — that has the effect of triggering birth control coverage for their employees through alternate means. This, they argue, puts them in the position of facilitating contraception in violation of their group’s religious beliefs.
According to Above the Law, “the Court will rule on whether the mandate and the accommodation violate RFRA, but refused specifically to hear claims under RFRA and the First Amendment that the government discriminated among those allowed an exemption and those not.” SCOTUBlog (11.17.15) summarizes: The Court will be reviewing one overall question in these cases: does the ACA’s birth control mandate violate the Religious Freedom Restoration Act for religious non-profit schools, colleges, hospitals, and charities that have objections based on their faith, and does the government arrangement for exemptions cure any problem under the Act? The Court, in one case, also accepted a second question: can the mandate be enforced when the non-profit has a health coverage plan that does not have a mandatory duty to obey the mandate?
Current Status. In its Conference of 11.6.15, the Court granted (at least in part) all seven of the challenges to the Obama administration’s accommodation for religious non-profits that object to providing their female employees with health insurance that includes access to certain forms of birth control (SCOTUSBlog, 11.6.15). The seven cases, originating in the Third, Fifth, Tenth, and District of Columbia Circuits, will be consolidated for hearing before the Court (list of cases here). The case will be argued in one of the final two weeks of March 2016. A decision is expected in June (SCOTUSBlog, 10.23.15).
- Eternal Word Television Network v. Burwell. As reported by The Beckett Fund for Religious Liberty (2.18.16), “EWTN’s case now on hold until Supreme Court decision.” Catholic World Report writes that “in a 2-1 decision delivered Feb. 18, the 11th Circuit U.S. Court of Appeals ruled against the Eternal Word Television Network (EWTN) in its challenge to the federal contraception mandate…In its decision, the federal court said, ‘We accept the plaintiffs’ sincere belief . . . that the accommodation puts them to a choice between honoring their religious beliefs and facing significant penalties. We nonetheless conclude that the accommodation imposes no substantial burden.’ Directly after delivering its ruling, the court placed its effects on hold until the Supreme Court rules on the mandate later this year. This protects EWTN from accumulating fines while waiting for the Supreme Court’s decision…’This 2-1 decision is not the end. The government’s unconstitutional mandate has lost repeatedly at the Supreme Court, and we believe it will lose again.’”
Prospects. Seven out of eight federal appeals courts have agreed with the administration that requiring the faith-based groups to make their objection known and identify their insurer or insurance administrator does not violate a federal religious freedom law (AP, 11.6.15). According to SCOTUSBlog (10.23.15),”Among the federal appeals courts, then, four have generally found that the opt-out provisions do not impose a substantial burden, but the most recent ruling by the Eighth Circuit found that the opt-out provisions do impose a substantial burden: the threat of fines against nonprofits that refuse to comply with the mandate. The Eighth Circuit also found that the law was not sufficiently narrow to justify the burden on religious non-profits.”
Potential Impact. According to Timothy Jost, “this litigation does not challenge the ACA itself, and is rather concerned with the legality of a particular regulation under the Religious Freedom Restoration Act. However, it is resolved, it will not otherwise affect the implementation of the ACA.”
- Cooper, Horace. The Birth Control Mandate is Unconstitutional. National Center for Public Policy Research. February 2012.
- Gunter, Jen. The Medical Facts About Birth Control and Hobby Lobby—From an OB/GYN. New Republic. July 6, 2014. Author argues that the 4 methods of contraception objected to by Hobby Lobby work by preventing ovulation or fertilization rather than preventing implantation or affecting the fetus following implantation. Only the copper UID possibly prevents implantation (this is unlikely but cannot be ruled out). The author asserts: “Plan B, which is one form of the morning-after pill, clearly wouldn’t. It works by inhibiting ovulation when given during a specific 48 hour window of the cycle. It has no other method of action. This is undisputed scientific fact. (Plan B is one of the best studied of all the methods of contraception).”
- FDA Required Labeling. “Plan B One-Step is believed to act as an emergency contraceptive principally by preventing ovulation or fertilization (by altering tubal transport of sperm and/or ova). In addition, it may inhibit implantation (by altering the endometrium).” This appears to directly contradict Gunter’s claim above.
Congressional Exemption–Johnson and Ericson v. Office of Personnel Management (Seventh Circuit Court of Appeals)
Summary. A provision in the ACA stipulates that on January 1, 2014, Members of Congress and their staff would lose their current employer-sponsored health insurance provided through the Federal Employees Health Benefits Program (FEHBP). Sloppy language left substantial ambiguity over four issues: a) which staff were affected; b) whether they were required to actually enroll in the Exchange; c) what would happen to subsidies (roughly 75% of premiums) that historically have been paid by Office of Personnel Management (OPM) to help offset the cost of coverage, but which legally cannot be paid to any plans except those in the FEHBP; and d) whether OPM or DHHS has implementation authority. OPM ruled in 2013 that the government could continue to make employer contributions to the health insurance plans of 535 members of Congress and their staff – even when they purchase coverage through the Exchanges.
Senator Ron Johnson and Brooke Ericson have filed suit on 1.3.14 against U.S. Office of Personnel Management and Katherine Archuleta, OPM’s director. As reported at Reuters, Senator Johnson filed this suit on grounds that OPM exceeded its legal authority in making this ruling. “Johnson said this violated the intent of Congress, which was that Congress would participate in the healthcare exchanges on the same terms as other Americans.” Plaintiffs also allege the OPM rule violates the Equal Protection Clause of the U.S. Constitution by treating members of Congress and their staffs differently from other similarly situated employees who obtain insurance coverage under the terms of the ACA and do not receive tax-free subsidies.
Current Status: On July 21, 2014, U.S. District Judge William Griesbach dismissed the case on grounds that the plaintiffs lacked standing to sue. According to an AP reporter, “Johnson’s belief that subsidies provided to lawmakers and their staffs are illegal isn’t a strong enough reason to disqualify him from the rule put in place under the Affordable Care Act, Griesbach said. The judge also said Johnson failed to show voters would view him negatively if his staff received subsidized insurance. And, the judge said, Johnson could simply avoid the problem by failing to designate any employees as official congressional office staff, a classification that qualifies them for the benefit.” On September 15, 2014, Sen. Johnson filed an appeal in the 7th Circuit Court of Appeals, arguing a lower court’s ruling that he lacked standing to challenge a portion of the law is “fatally flawed.” Attorney Paul Clement was hired to represent plaintiffs. On 4.14.15, a three-judge panel at the 7th U.S. Circuit of Appeals ruled that Sen. Ron Johnson, R-Wis., and one of Johnson’s aides, Brooke Ericson, have no standing to sue. In granting OPM’s motion, Judge William C. Griesbach said that any injury arising from an administrative burden “is too speculative and undeveloped to constitute a redressable injury.” While administrative costs can in some cases constitute an injury, the “essentially ministerial act” at issue here is not such a case, Judge Griesbach said. According to Timothy Jost (6.23.15), “Senator Johnson may request Supreme Court review.”
Current Prospects. There have been at least 23 significant changes made to the ACA through unilateral action. While many of these have been of dubious constitutionality/legality, most have been executed in a way that prevents them from being litigated because no one has standing to sue. This is a rare case in which individuals affected by unilateral administrative change in the law potentially have standing to sue.
Potential Impact. The immediate specific impact would affect only members of Congress and their staff. According to Heritage Foundation scholars, “Congress could keep its current health coverage by repealing Section 1312(d)(3)(D) of Obamacare. Yet, the political price for doing so is that Members of Congress must repeal the rest of Obamacare as well—so that their constituents are allowed to keep their health plans, too.”
State Payment of Health Insurance Tax–States of Texas, Kansas and Lousiana v. DHHS (District Court, Northern District of Texas, Wichita Falls Division)
Summary. The Affordable Care Act imposed a health-insurance providers’ fee on insurance companies, for the purpose of taxing the windfall they were expected to receive from increased enrollment. In March 2015 publication of Actuarial Standard of Practice Number 49 for the first time notified the several States that, functionally, they were being assessed or taxed the Health Insurance Providers Fee. States were assessed this fee because they use managed-care organizations to provide Medicaid services. According to Ilya Shapiro, nothing in the ACA allows the federal government to force states to pay the fee, so the administration left it to the “private” Actuarial Standards Board to determine what makes a state’s payments to managed-care organizations “actuarially sound,” as required by law. The board then interpreted that “actuarially sound” standard to require states to pay the taxes assessed on their managed-care organizations. This assessment raises serious coercion issues, as the states have no choice but to pay the tax or lose their federal Medicaid funds.
Most states, including Texas, contract with private managed-care organizations to cover much of their Medicaid and Children’s Health Insurance Program (CHIP) populations. CMS relies on standards created by the Actuarial Standards Board to ensure that rates for these managed-care plans are actuarially sound. The decision to impose this new fee means that unless states cover their portion of the cost, the federal government can decertify those Medicaid managed-care plans and thus legally withhold federal Medicaid funds from those states. On 10.22.15, Texas, joined by Kansas and Louisiana, sued the government on grounds that DHHS has no authority to delegate rulemaking authority to a private entity and that forcing states to pay the tax is unconstitutionally coercive.
Potential Impact. According to John Davidson, “the health-insurance-provider fee amounts to a federal tax on state governments — one that will allow the feds to collect between $13 and $15 billion from states over the next decade.”
State Health Plan Reinsurance Payments–State of Ohio v. United States (U.S. District Court, Southern District of Ohio, Eastern Division)
Summary. According to Timothy Jost (1.7.16), the state of Ohio filed a lawsuit challenging the requirement that state employee health plans contribute to the transitional reinsurance program. The State of Ohio, four of its state universities, Warren County, and the Ohio Turnpike Authority had sued claiming that the fee imposed on insurers and group health plans under the ACA’s Transitional Reinsurance Program did not apply to them, and that Congress lacked the constitutional authority to impose the fee on them. Ohio and the other plaintiffs were assessed contributions for their group health plans. They paid, but sued for a refund of the money.
Current Status. According to Timothy Jost (1.7.16), on January 5, 2016, Judge Algenon Marbley of the federal district court for the Southern District of Ohio dismissed Ohio v. United States. The court held that under the ACA, the Public Health Services Act (PHSA) definitions that it incorporates, and the Employee Retirement Income Security Act (ERISA) provisions that the ACA and the PHSA in turn rely on, state employee plans are clearly group health plans subject to the reinsurance fee.
Potential Impact. Any immediate impact would be restricted to Ohio, although if the suit is eventually successful, it might induce other states to seek similar relief.
Medicaid Coercion–Scott v. HHS (U.S. District Court, Northern District of Florida, Pensacola Division)
Summary. According to Timothy Jost (6.23.15), in this case, governor Rick Scott has claimed that HHS terminated Florida’s low-income hospital payment Medicaid waiver to coerce it into expanding Medicaid.
Potential Impact. Any immediate impact would be restricted to Florida.