The Obama administration broke the law when officials decided to delay a crucial provision of the president’s signature healthcare law, according to a lawsuit filed Tuesday in federal court.
The provision requires companies with 50 or more employees to offer insurance to their workers or pay penalties. The mandate, a major pillar of the ACA, was to take effect in January 2014, under language in the law.
The administration’s surprise move in July to postpone the regulations until the following January violate the Administrative Procedure Act and exceed President Obama’s authority, the lawsuit alleges.
“He has no more power to do that than your or I,” said Larry Kawa, the Boca Raton-based orthodontist named as plaintiff in the suit.
Kawa, whose practice employs 70 people, said he spent thousands of dollars worth of legal fees to comply with the mandate in time to meet the initial deadline.
Kawa said he opposes the mandate and ObamaCare in general, but believes his financial losses give him standing to challenge the delay.
Judicial Watch President Tom Fitton, also a critic of the law, said, “it ought to fail as quickly as possible, so Americans can move past it.”
Senior White House adviser Valerie Jarrett announced the postponement in early July, citing confusion from businesses about how to report employee insurance information to the Internal Revenue Service.
“We have heard the concern that the reporting called for under the law about each worker’s access to and enrollment in health insurance requires new data collection systems and coordination,” Jarrett wrote on the White House’s blog. “We will convene employers, insurers, and experts to propose a smarter system and, in the interim, suspend reporting for 2014.”
The IRS has since issued additional reporting guidance.
But Fitton suggested the real motive for the delay was to push the mandate’s enactment beyond the 2014 elections.
“Politics do not trump the Constitution or the rule of law,” he said.
Fitton, pointing to estimates released by the nonpartisan Congressional Budget Office, said the delay would cost $10 billion in lost revenue from employers who otherwise would face penalties.
The lawsuit was filed Tuesday morning in the U.S. District Court for the South District of Florida. Listed as defendants are the Treasury Department, the Internal Revenue Service, Treasury Secretary Jacob Lew and interim IRS chief Danny Werfel.
The suit comes on the same day that ObamaCare's new insurance marketplaces opened for business.