U.S. Court Rejects Anti-Obamacare Lawsuit

Over 85% of certified public accountants recommend that small businesses use independent payroll providers for the best payroll management. As a recent federal court case has shown, however, there is one U.S. senator who doesn’t trust his payroll service: the U.S. Office of Personnel Management (OPM).

The LA Times reports that on Tuesday, the U.S. Court of Appeals for the 7th Circuit rejected a lawsuit against the Affordable Care Act (ACA), otherwise known as “Obamacare.”

A three-judge panel unanimously struck down the lawsuit entitled Johnson vs. U.S. Office of Personnel Management. Writing for the panel, Judge Joel M. Flaum said that the plaintiff, Senator Ron Johnson (R-Wis.), did not have a compelling argument in his grievance against Obamacare.

The 7th Circuit (which, in a touch of irony, is based in President Obama’s former constituent city of Chicago) found his main argument to have no legal standing. Johnson claimed that the ACA denied him his constitutional right to equal protection under the 14th Amendment because it forced his employer — the United States government — to offer him an insurance subsidy.

However, the judges ruled that Johnson could not prove that the offer alone would cause him “reputational [sic] and electoral injury” since he has the right to turn down the subsidy — a right that he exercised. Consequently, the judges agreed that he has no standing to sue.

“We do not see how Sen. Johnson’s reputation could be sullied…by being offered, against his will, a benefit that he then decided to refuse,” Judge Flaum wrote.

Johnson hasn’t said if he will appeal to the Supreme Court, though some legal experts are skeptical of whether the Court would even accept the case. Regardless, Johnson remains steadfast in his opposition to Obamacare.

The ruling was “another executive action by the administration [that] will go unchallenged, all based on the legal technicality of standing,” Johnson said.

The lawsuit itself is based on what some would consider a technicality. The ACA’s federal and state individual healthcare plan exchanges are designed for people without employer-sponsored coverage. People without employee-sponsored insurance often have to pay higher costs as well as face discrimination from insurance companies (such as, for example, when a person has a pre-existing condition) than those who are covered by their employers. Employer-sponsored coverage is at least partially paid by the employer.

Johnson’s objection is that he and his staff were offered subsidies for the ACA plan exchanges despite the fact that members of Congress and their staffs are already covered by the federal government via the U.S. Office of Personnel Management, an independent government agency that handles the civil services for federal employees.

Though congressional employees already had coverage, in 2009, when Congress was deliberating on the ACA, Sen. Charles Grassley (R-Iowa) added an amendment mandating all members of Congress and their staff to acquire healthcare through the bill’s plan exchanges.

Members of Congress should receive the same plans they were voting for, Grassley felt.

The problem was that there was no legal way for any employers to pay their share of the plan exchanges since the plans were designed for people without employer-sponsored insurance. As a result, congressional employees were initially denied subsidies from their employers and stood to see a $10,000-a-year pay cut.

Fortunately for them, the OPM eventually ruled that the federal government can contribute to the exchange plans. Johnson, however, was not pleased with the ruling. He felt his equal protection rights were being violated since he and his staff were offered a subsidy that not all exchange buyers can get.

The court rejected the argument as specious, considering that the subsidy, an employer contribution, makes him equal to other citizens who receive employer contributions.

Several legal experts agree with the Court’s ruling.

“After all,” Nicholas Bagley, Professor of Law at the University of Michigan wrote, “his core objection is that the government is giving him and his staffers more money than it should. Getting a windfall from Uncle Sam isn’t exactly an injury.”

Leave a Reply