The state of Ohio and Warren County government filed a lawsuit in federal court Monday challenging a section of the Affordable Care Act saying an insurance fee imposed by the law is unconstitutional.
Attorney General Mike DeWine said his office, Warren County and four public universities in Ohio filed the lawsuit in U.S. District Court after President Barack Obama’s administration failed to respond to letters challenging the fees and calling for a refund of funds paid by state and local governments under the law.
“As a result, we had no choice but to file our lawsuit today to protect Ohio taxpayers from this unprecedented federal overreach,” DeWine said during a press conference in the county administration building in Lebanon. “To put this simply, governments don’t tax other governments.”
The Obama administration referred questions about the lawsuit to the Department of Health & Human Services, which declined comment.
The fees, part of the Transitional Reinsurance Program, are assessed on employer-provided group health plans. The fees are to be used to subsidize insurance companies who underestimate their medical costs under the law, passed by the U.S. Congress in 2010.
The U.S. Constitution prohibits the federal government from levying “this broad-based tax on the states” through charges against the self-funded health plans operated by the state and local governments across Ohio, DeWine said.
“Second, even if the federal government had such authority, the Affordable Care Act does not specify state or local governments as being among the employers who may be assessed the tax,” he said.
DeWine, Warren County Commissioner Dave Young and county Prosecutor David Fornshell also said the charges were illegal because 20 percent of the money was deposited in the federal treasury for other expenses.
“We’re not trying to overhaul the Affordable Care Act,” Young said during the press conference.
Instead Young called the fees “a tax on a tax,” he said. “It literally is changing the way we do government in America.”
No other states have filed similar lawsuits, according to Dan Tierney, spokesman for DeWine.
The Warren County Board of Commissioners retained Kyle Duncan, chief counsel for Hobby Lobby in its successful challenge to the health care law’s requirement that the employers provide female employees with no-cost access to contraception. The U.S. Supreme Court in a 5-4 decision in June agreed with Hobby Lobby that the requirement violated federal law protecting religious freedom.
The terms of Duncan’s contract were being drawn up and were unavailable Monday, Fornshell said after the press conference.
In December, Young and the other county commissioners discussed withholding the payment before making it on protest. Failure to make the payments could result in fines of $100 a day per employee, or $180,000 a day for Warren County.
The ACA debate has generally split along party lines.
DeWine and the Warren County officials are all Republicans.
Several Democratic supporters of the health care law, including Rick Smith, a recent candidate for the state legislature, protested during DeWine’s press conference.
The protesters dismissed the lawsuit as another political attack on the law, which Republican leaders across the country have said they will repeal and replace.
“The acts DeWine and the commissioners are taking are unnecessary and political theater. It’s not going to help anyone in this county,” said Sara Davis of Lebanon, holding a sign that said “The Supreme Court upheld the ACA. Obey the Law!”
In March, the Supreme Court is expected to hear another case challenging the law.
The case involves taxpayer subsidies that help individuals afford their premiums. The decision could affect whether the federal government can provide subsidies in states, including Ohio, that didn’t set up ACA marketplaces.