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Local News

February 20, 2014

State AG takes another legal stab at Obamacare law

DUNCAN — Oklahoma Attorney General Scott Pruitt has asked a federal judge in Muskogee to rule in favor of the state in its legal challenge to the Affordable Care Act.

Oklahoma is challenging an IRS rule regarding the assessment of tax penalties on “large employers,” including local and state governments.

 The IRS wants to assess so-called  “large employer” penalties in states – like Oklahoma – that did not establish state health care exchanges even though the law states that tax penalties are only to be assessed in states that set up state-based health care exchanges.

“The IRS is unlawfully changing the Affordable Care Act without going through Congress. The agency is ignoring the language of the ACA in order to ‘fix’ the law,” Pruitt said. “That’s not what our Constitution allows: Congress passes laws and the executive branch administers them. Oklahoma’s lawsuit is about fighting the administration’s attempt to ‘fix’ the health care law through executive fiat.”

If the federal judge rules in favor of the state’s motion for summary judgment, the IRS would not be allowed to issue tax penalties on “large employers” for not offering ACA complaint health insurance.

“The ACA, as passed by Congress, gave Oklahoma and other states a choice in the implementation of the health care law. But the IRS is trying to take that choice away through this unlawful rule,” General Pruitt said. “The administration miscalculated how many states would support this law and set up their own health care exchanges. So the administration turned to the IRS to ‘fix’ the law by pushing through rules Congress never passed.”

Oklahoma became the 28th state to challenge Obamacare on Jan. 21, 2011.

After the Supreme Court ruled the health care law could stand via a system in which taxes are assessed against individuals and businesses that did not buy health insurance, the Internal Revenue Service formulated a rule to collect the so-called “employer mandate” assessments from businesses with 50 or more workers that do not comply with the health care law.

“The employer mandate has the potential to devastate Oklahoma emploers who would be forced to pay a tax/penalty of $2,000 each for all of their employees aftr the first 30, even if just one employee qualifies for a tax credit or subsidy through an exchange. For example, if a company has 1,000 employees and one employee now qualifies for an exchange, the company would pay the $2,000 tax for that employee and for 970 other employees with a total penalty of $1,94 million,” Oklahoma legal petition states.

The Oklahoma lawsuit challenges the IRS plan and U.S. District Judge Ronald White in August rejected the federal government’s request for summary judgment.

 Pruitt’s court filing on Tuesday seeks summary judgement. The federal government’ response is due March 18.

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