The legal arguments against ObamaCare aren’t over, despite what supporters of the law may claim. There is a lawsuit currently working through federal court in Oklahoma that would, if successful, stop the IRS from illegally enforcing ObamaCare’s employer mandate in states that have opted out of the insurance exchanges.
Oklahoma Attorney General Scott Pruitt announced on Monday that the lawsuit had won its first battle against the Obama Administration.
“The court rejected the federal government’s argument that Oklahoma lacked standing to challenge the law, allowing us to proceed with this pivotal case,” said Pruitt in a statement. “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.”
This is the “other” IRS scandal, and it hasn’t received a lot of attention, despite being around since last year when the IRS decided to illegally enforce the employer mandate in states that rejected ObamaCare exchanges. The rules for this were finalized by the agency earlier this year.
The employer mandate, the enforcement of which was recently delayed for one year, stipulates that employers with 50 or more full-time employees have offer health insurance benefits or face a punitive $2,000 per worker tax. Governing Magazine reported in April that the employer mandate tax could cost as much as $1.3 billion each year for businesses in states that have rejected the exchanges.
Perhaps the only silver-lining in the Supreme Court’s decision last year was the freedom given to states to decide for themselves whether or not to take part in ObamaCare’s insurance exchanges.
This put the Obama Administration in a bind, so they decided to implement federal exchanges in states that opted out, which the IRS has used for its justification to enforce the mandate in these states.
As already noted, but worth reiterating, there is no statutory authority for the agency to enforce the mandate. The law very clearly, very explicitly says that the employer mandate tax only applies to states that establish an exchange.
If Oklahoma is successful in this case, it will go a long way in undoing some of the damage ObamaCare will cause as well as scaling back the IRS’s involvement in the law.