A project of the George Washington University's Hirsh Health Law and Policy Program and the Robert Wood Johnson Foundation

Legal Challenges

Courts issue conflicting ACA decisions

Posted on July 22, 2014

Today, two federal appeals courts issued contradictory decisions regarding the availability of advanced premium tax credits, or subsidies, for federally-facilitated marketplaces (FFM).  In a 2-1 decision in Halbig v. Burwell, the US Court of Appeals for the DC Circuit ruled that the Internal Revenue Services (IRS) did not possess the authority to issue subsidies for qualifying individuals enrolling in FFM.  In a similar case entitled King v. Burwell, the Fourth Circuit Court of Appeals in Richmond unanimously upheld that subsidies may be offered by the IRS in both federally-facilitated and state-based Marketplaces.  Under the Affordable Care Act (ACA), individuals earning 400% or less of the federal poverty level may receive subsidies in order to offset some of the premium costs for obtaining health insurance through the ACA Marketplaces.  The differing opinions issued today indicate that this issue will likely be taken up by the Supreme Court.

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Premium subsidies for FFM upheld

Posted on January 15, 2014

A DC federal court judge ruled today that premium subsidies are permissible in federally-facilitated Marketplaces (FFM) established by the Affordable Care Act (ACA). In the case, Halbig v. Sebelius, the plaintiffs argued that premium subsidies, or advanced premium tax credits, to help individuals earning between 100-400% of the federal poverty level purchase insurance were only intended for states operating state-based marketplaces. The court, however, found that congressional intent was to offer premium subsidies for individuals enrolling in all marketplaces. Similar cases are still pending throughout the country.

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Federal judge permits continuation of subsidy lawsuit

Posted on August 13, 2013

In a ruling issued yesterday, Judge Ronald A. White of the US District for the Eastern Division of Oklahoma said that Oklahoma may proceed with their case challenging the legality of the Internal Revenue Service (IRS) provision allowing individuals to receive subsidies from federally-facilitated Marketplaces. Oklahoma is arguing that as the Affordable Care Act (ACA) is written, only residents of states that are running their own state-based Marketplace are eligible to receive federal subsidies to offset premium costs. The ruling stated that Oklahoma had standing to challenge this portion of the ACA, as the state qualifies as a large employer that will face higher costs due to the law.

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Federal judge dismisses challenge to individual mandate

Posted on July 1, 2013

DC District Court Justice Beryl Howell dismissed a lawsuit against the Affordable Care Act’s (ACA) individual mandate. The lawsuit was brought forth under the Origination Clause, which states that all bills designed to raise revenue must originate in the House of Representatives. Justice Howell ruled that the ACA’s individual mandate was not created for the intent of raising revenue, and any shared responsibility penalty received by the government is a result of entities choosing not to obtain coverage, thereby “symbolizing the government’s failure to obtain its stated goal of universal coverage.”

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Commonwealth Fund study finds insurers spend less than 1% of premium dollars on health care quality improvement

Posted on March 22, 2013

The medical loss ratio (MLR), a requirement within the Affordable Care Act (ACA), states that insurers must spend either 80% or 85% of their premium dollars on medical claims or quality improvement. A new Commonwealth Fund study found that in 2011, insurers spent less than 1% of their premium dollars on quality improvement measures, which translates to a combined spending of $2.3 billion, or $29 per subscriber. The study describes how different insurer types (publicly traded, nonprofit, provider-sponsored, etc.) allocate their premium dollars, specifically focusing on measures for quality improvement.

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SCOTUS denies contraceptive coverage emergency injunction

Posted on December 27, 2012

Hobby Lobby, a Christian-run arts and crafts chain, filed for an emergency injunction on December 21, 2012 with the Supreme Court to block President Obama’s birth control coverage rules. Hobby Lobby’s complaint surrounds the Affordable Care Act’s (ACA’s) requirement that most employers cover contraception without copay.

Yesterday, the Supreme Court today denied Hobby Lobby’s request, which was joined by the Christian book company, Mardel. The U.S. Supreme Court said it will not decide the case before lower courts have ruled. Justice Sonia Sotomayor argued that the petitioners did not meet the standards requisite for a preliminary injunction. The court also denied the request that the court take up the entire case, in which they argue that the ACA’s contraceptive coverage requirement forces them to violate their religious beliefs.

The case will return to the district court for a ruling on the merits of whether the Obama administration can require employers who have religious objections to contraceptive coverage to provide said insurance coverage in their employer plan.

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Supreme Court orders Fourth Circuit to hear Liberty case

Posted on November 26, 2012

The Supreme Court on Monday ordered the Fourth Circuit Court of Appeals to examine the constitutionality of the Affordable Care Act’s (ACA’s) employer requirement to cover contraceptives without a co-pay. This move could put the ACA in front of the Supreme Court again as early as next year. The order was in response to a request from Liberty University, one of the groups that sued over the mandate in 2010. After the June ruling, the Supreme Court dismissed Liberty’s entire lawsuit. Over this past summer, Liberty asked the Supreme Court to reopen the arguments pertaining to the employer mandate and the contraceptive coverage mandate. The court agreed to the request and today’s order instructs the Fourth Circuit to review both pieces of the argument.

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Judge exempts religious company from ACA’s contraception requirement

Posted on November 19, 2012

On Friday, U.S. District Judge Reggie Walton granted a preliminary injunction to Tyndale House Publishers, enabling the company to reject the Affordable Care Act (ACA) provision which requires employers to provide its employees with contraceptive coverage. The company argued that it does not want to cover contraceptives, as it  views them as abortions.

Plan B and IUDs are the contraceptives at issue in the case. If a woman is already pregnant, the Plan B pill has no effect. Plan B merely prevents ovulation or fertilization of an egg. Plan B can also prevent a fertilized egg from implanting on the uterine wall. IUDs mainly work by blocking sperm, but may also have the same anti-implantation effect. According to Tyndale, this implantation prevention is not morally different than abortion.

Tyndale president and CEO Mark D. Taylor filed the lawsuit against the U.S. Department of Health and Human Services (HHS) last month, arguing that the provision causes employers to violate their religious beliefs.

In his decision, Judge Walton acknowledged that the government has interests in promoting public health and ensuring that women have equal access to health care, but he said that the government has not offered proof that the ACA’s contraceptive coverage provision furthers these interests.

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Michigan judge grants injunction exempting private business from contraception coverage requirement

Posted on November 1, 2012

Judge Robert H. Cleland of the U.S. District Court of the Eastern District of Michigan granted a preliminary injunction exempting Weingartz Supply Company from the Affordable Care Act’s (ACA’s) contraception coverage requirement. Thomas More Law Center is representing Weingartz. The injunction marks the second time that a judge has issued an injunction for a private company on this provision. However, the Michigan judge did deny a preliminary injunction to Legatus, a nonprofit conservative Catholic business organization that filed suit alongside Weingartz. Because the business is a religious organization, as opposed to a private business owned by a religious individual, Legatus qualifies for the ACA “safe harbor,” and thus is not mandated to cover contraception while the Obama administration finalizes the exemption policy.

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DOJ will not attempt to block new challenges to ACA

Posted on November 1, 2012

The Department of Justice (DOJ) told the Supreme Court yesterday that they would not attempt to block requests to reopen a lawsuit against the Affordable Care Act (ACA). Such a lawsuit could potentially place the ACA in front of the Supreme Court again as early as next year.

In 2010, Liberty University sued over the minimum coverage provision and other aspects of the ACA, but the case was set aside when the 26 states and NFIB case went before the Supreme Court. Because the court upheld the constitutionality of the individual mandate in its June 28th decision, it essentially tossed out Liberty’s lawsuit. Liberty now wants the Supreme Court to review its other challenges to the ACA.

Specifically, Liberty claims that the law’s employer coverage requirements are unconstitutional, as the mandate’s contraception coverage requirement violates the right to freely exercise religion. Over 30 such claims have been filed against the Obama administration. Solicitor General Donald Verrilli’s letter to the court states that although the DOJ believes that the Liberty claims “lack merit,” the DOJ does not oppose the courts reviewing the suit.

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