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No. 13-623 Halbig Et Al v. Sebelius Et Al

No. 13-623 Halbig Et Al v. Sebelius Et Al

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Published by DowningPostNews
Plaintiffs:

JACQUELINE HALBIG, DAVID KLEMENCIC, CARRIE LOWERY, SARAH RUMPF, INNOVARE HEALTH ADVOCATES, GC RESTAURANTS SA, LLC, OLDE ENGLAND'S LION & ROSE, LTD, OLDE ENGLAND'S LION & ROSE AT CASTLE HILLS, LTD, OLDE ENGLAND'S LION & ROSE FORUM, LLC, OLDE ENGLAND'S LION & ROSE AT SONTERRA, LTD, OLDE ENGLAND'S LION & ROSE AT WESTLAKE, LLC and COMMUNITY NATIONAL BANK

Defendants:

KATHLEEN SEBELIUS, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, JACOB J. LEW, UNITED STATES DEPARTMENT OF THE TREASURY, STEVEN MILLER and INTERNAL REVENUE SERVICE

RE: Subsidy Expansion Rule in States without a state or state partnered health exchange
Plaintiffs:

JACQUELINE HALBIG, DAVID KLEMENCIC, CARRIE LOWERY, SARAH RUMPF, INNOVARE HEALTH ADVOCATES, GC RESTAURANTS SA, LLC, OLDE ENGLAND'S LION & ROSE, LTD, OLDE ENGLAND'S LION & ROSE AT CASTLE HILLS, LTD, OLDE ENGLAND'S LION & ROSE FORUM, LLC, OLDE ENGLAND'S LION & ROSE AT SONTERRA, LTD, OLDE ENGLAND'S LION & ROSE AT WESTLAKE, LLC and COMMUNITY NATIONAL BANK

Defendants:

KATHLEEN SEBELIUS, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, JACOB J. LEW, UNITED STATES DEPARTMENT OF THE TREASURY, STEVEN MILLER and INTERNAL REVENUE SERVICE

RE: Subsidy Expansion Rule in States without a state or state partnered health exchange

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Categories:Types, Business/Law
Published by: DowningPostNews on May 13, 2013
Copyright:Attribution Non-commercial

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07/10/2013

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IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA
 JACQUELINE HALBIG204 Guthrie AvenueAlexandria, Virginia 22305;DAVID KLEMENCIC1780 Long Run RoadCairo, West Virginia 26337;CARRIE LOWERY305 South 14th Street, Apt. A Nashville, Tennessee 37206;SARAH RUMPF1500 South Lamar BoulevardAustin, Texas 78704;INNOVARE HEALTH ADVOCATES9915 Kennerly Road, Suite JSt. Louis, Missouri 63128;GC RESTAURANTS SA, LLCOLDE ENGLAND’S LION & ROSE, LTDOLDE ENGLAND’S LION & ROSE ATCASTLE HILLS, LTDOLDE ENGLAND’S LION & ROSEFORUM, LLCOLDE ENGLAND’S LION & ROSE ATSONTERRA, LTDOLDE ENGLAND’S LION & ROSE ATWESTLAKE, LLC16109 University Oak San Antonio, Texas 78249; andCOMMUNITY NATIONAL BANK 210 Main StreetSeneca, Kansas 66538,
 Plaintiffs,
 (continued on next page))))))))))))))))))))))))))))))))))))))))))) Civ. No. 13-623
Case 1:13-cv-00623-RWR Document 1 Filed 05/02/13 Page 1 of 15
 
1
v.
KATHLEEN SEBELIUS, in her officialcapacity as U.S. Secretary of Health andHuman Services; and theUNITED STATES DEPARTMENT OFHEALTH AND HUMAN SERVICES200 Independence Avenue SWWashington, District of Columbia 20201;JACOB LEW, in his official capacity as U.S.Secretary of the Treasury; and theUNITED STATES DEPARTMENT OF THETREASURY1500 Pennsylvania Avenue NWWashington, District of Columbia 20220; andSTEVEN MILLER, in his official capacity asActing Commissioner of Internal Revenue;and theINTERNAL REVENUE SERVICE1111 Constitution Avenue NWWashington, District of Columbia 20004,
 Defendants.
))))))))))))))))))))))))) 
COMPLAINT
1.
 
One of the pillars of the Patient Protection and Affordable Care Act (“ACA” or “the Act”) is its creation of new health insurance “Exchanges”—state-level clearinghouses for standardized insurance products, where insurers will be regulated and individuals can satisfy theindividual mandate, the new statutory obligation to purchase comprehensive insurance policies.
2.
 
To encourage states
 
to establish Exchanges, Congress used carrots, such as start-up grants to help fund the creation of Exchanges; and sticks, such as prohibiting states fromtightening Medicaid eligibility standards before setting up Exchanges. The biggest carrot was theoffer of premium-assistance subsidies from the Federal Treasury—refundable tax credits to help astate’s low- and moderate-income residents buy insurance—if that state set up its own Exchange.
Case 1:13-cv-00623-RWR Document 1 Filed 05/02/13 Page 2 of 15
 
2States rejecting the offer got a stick instead: the imposition of a federally-established, federally-operated Exchange in the state, with no subsidies at all.
3.
 
As it turns out, a majority of states have declined to establish Exchanges. Thatchoice has left the federal government with the burden of establishing Exchanges in those states, but without the burden of paying for premium-assistance subsidies to the residents of thosestates—just the balance that Congress struck.
4.
 
 Notwithstanding express statutory language limiting premium-assistancesubsidies to Exchanges established by states, the Internal Revenue Service (“IRS”) has promulgated a regulation (“the IRS Rule” or “the Subsidy Expansion Rule”) purporting toauthorize subsidies even in states with only federally-established Exchanges, thereby disbursingmonies from the Federal Treasury in excess of the authority granted by the Act. The IRS Rulesquarely contravenes the express text of the ACA, ignoring the clear limitations that Congressimposed on the availability of the federal subsidies. And the IRS promulgated the regulationwithout any reasoned effort to reconcile it with the contrary provisions of the statute.
5.
 
While most subsidies benefit recipients, the ACA’s subsidies actually serve tofinancially injure and restrict the economic choices of certain individuals. Some individualswould, but for their eligibility for federal subsidies, be exempt from the Act’s individual mandate penalty under an exemption applicable to low- or moderate-income individuals for whominsurance is “unaffordable.” For these people, the Subsidy Expansion Rule, by making insuranceless “unaffordable,” subjects them to the individual mandate’s requirement to purchase costly,comprehensive health insurance that they otherwise would forgo. (The Act’s subsidies do notusually cover 100% of insurance premiums.)
Case 1:13-cv-00623-RWR Document 1 Filed 05/02/13 Page 3 of 15

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