The Unlawful Delay

No one should be surprised by President Obama’s move yesterday to delay by executive action the Affordable Care Act’s requirement for private health insurers to offer the complete package of “essential health benefits” (EHB), whose costs have driven insurers to cancel millions of lower-priced individual policies. The House of Representatives had scheduled a vote to address the problem legislatively, and the president, apparently worried that nervous Democrats might support such a bill, tried to preempt that vote by announcing that the Department of Health and Human Services, using its “administrative authority,” will allow insurers to renew current policies for 2014 without including all the benefits that the law requires.

This has become a much-used page in President Obama’s playbook. During his reelection campaign, in a clear attempt to court Hispanic voters, the president directed the Department of Homeland Security not to initiate deportation proceedings against certain illegal aliens — the country’s chief law-enforcement officer ordering, in essence, the department not to enforce the law. Last summer, perhaps recognizing the enormous implementation problems that were to come or the negative effect on the stubbornly soft jobs market, or else seizing the opportunity to steer more people into the government-run exchanges (or perhaps all three), he delayed for one year the ACA’s mandate for employers with at least 50 employees to provide health insurance to their employees by January 1, 2014. He also has made recess appointments when the Senate was not in recess (which have since been struck down by three appellate courts) and attempted to implement gun-control measures that had no hope of being enacted legislatively.

It is not unusual for presidents to implement or refine policies by executive order. President George W. Bush issued 291 executive orders, Bill Clinton signed 364, and Ronald Reagan 381. Executive orders are a longstanding accepted method for presidents to exert their unquestioned authority over the executive branch. President Obama, however, at least in the instances noted above, has exceeded his authority and violated the Constitution, either by failing to “take care that the laws be faithfully executed” or by encroaching upon the constitutional authority of Congress. Simply put, the president does not have the authority not to execute or enforce certain laws.

Presidential executive orders are evaluated according to the Supreme Court’s decision in Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952), in which the Court held that President Truman had exceeded his authority by directing the seizure of steel mills to avert a strike during the Korean War, stating that “the president’s power to see that laws are faithfully executed refutes the idea that he is to be a lawmaker.” In a concurring opinion by Justice Robert Jackson, Youngstown Sheet & Tube established the three-part framework to be used thereafter for considering the constitutionality of executive action.

First, there are areas of express or implied constitutional or statutory presidential authority, where the president’s authority for executive action is at its height. Second, there are areas where Congress has not legislated, and where the line of authority between the president and Congress is vague or overlapping. Finally, there are areas where presidential action is “incompatible with the express or implied will of Congress,” where the president’s authority is at its lowest.

It is doubtful that President Obama’s decision to suspend the requirement that private health insurers provide coverage set forth in Section 1302 of the ACA by January 1, 2014, would be upheld under the Youngstown Sheet & Tube analysis. Because the statute specifically included an effective date that the president is contravening by the delay, his action is “incompatible with the express . . . will of Congress,” and therefore his authority is at its lowest, according to Justice Jackson’s concurrence. Indeed, a report prepared by the Congressional Research Service in 2011 that considered the president’s authority to act by executive order specifically in the context of the Affordable Care Act concluded that “a President would not appear to be able to issue an executive order halting an agency from promulgating a rule that is statutorily required by [the ACA], as such an action would conflict with an explicit congressional mandate.”

To illustrate further where the line is drawn, the ACA mandates the secretary of health and human services to issue regulations implementing its myriad provisions. The statute doesn’t dictate what those regulations must be, just that they must be formulated. Accordingly, the secretary — and the president — are not at liberty to ignore this requirement and decide not to establish those regulations, but their content is left to the discretion of the executive branch. Similarly, whereas the ACA affords the executive branch discretion to further define “essential health benefits” (subject to their being consistent with the broad categories of services described in the text), the implementation date is an explicit requirement of the law. The president’s order violates that requirement.

Aside from the dubious legality of the president’s unilateral and arbitrary actions in delaying certain ACA mandates, the context for both actions by the president seems to undermine their legitimacy. Both moves come off as naked political ploys rather than sincere attempts to wrestle with the problems of implementing this massive statute that nobody read before passing. Last summer, after issuing the delay in the employer mandate, the president found himself in the awkward position of threatening to veto his very own action when the House considered legislation that would have legitimized the president’s delay of the employer mandate, while also delaying for a year the individual mandate to buy health insurance. (As it turns out, a delay in the individual mandate seems more inevitable by the day.) More recently, the president delayed the EHB requirement on the eve of a House vote on a bill that would have accomplished the same thing — legitimately, however. He clearly did this to beat the Republican House to the draw and avoid any legislative changes to his signature law, no matter how beneficial they might be. In both cases, the fact that Congress was willing to act to accomplish the same substantive change to the law that the president undertook unilaterally makes his extralegal executive action all the more suspect.

We may soon find out definitively whether the president’s action delaying implementation of the EHB requirement by a year passes constitutional muster. On October 1, 2013, an orthodontia practice that employs more than 50 people sued the Obama administration in the Southern District of Florida under the Administrative Procedures Act, alleging that the one-year delay of the employer mandate — contrary to the “unambiguous,” statutorily imposed implementation date of January 1, 2014 — is “arbitrary, capricious, and contrary to law.” One is hard pressed to distinguish President Obama’s action in delaying the employer mandate from his most recent action in delaying the EHB requirement, so a decision by the federal district court in South Florida would be very illuminating. Of course, whether anyone challenges this most recent action by the administration remains to be seen, but a challenge by a beneficiary expecting to receive the full package of benefits from her existing health plan on January 1, 2014 — or by an insurer that had the rug pulled out from under it by the flip-flop in administration policy — seems almost inevitable.

— Scott A. Coffina is a former associate counsel to President George W. Bush and a former Assistant United States Attorney. He currently is in private practice in Philadelphia and Washington, D.C.