Bench Memos

One-Year Obamacare Delay Doesn’t Affect HHS Mandate

The Obama administration’s announcement yesterday of a one-year delay in the implementation of Obamacare’s employer mandate shows that even the White House sees that the wheels are coming off the Obamacare bus, as my Ethics and Public Policy Center colleague Yuval Levin discusses in this extensive Corner post. But that doesn’t mean that the bus has stopped crashing into things, and it especially doesn’t mean that the implementation of the HHS contraceptive mandate is being delayed. Here’s an e-mail from the Becket Fund lawyers that explains the details:

A lot of folks have been wondering publicly, e.g. Prof. Friedman, about whether yesterday’s announcement from Treasury that enforcement of the employer mandate would be delayed in some respects until 2015 creates a ripeness issue for the legal challenges to the HHS preventive services mandate. These questions are based on a lack of a thorough understanding of Treasury’s announcement and the many statutory provisions involved (which is understandable, given the complexity of the issues).

We’ve dug deeply into the substance of Treasury’s announcement, and we’re confident that it doesn’t create any ripeness issues with the HHS lawsuits-and we doubt DOJ is even contemplating making that argument.

All Treasury announced was that it would suspend certain reporting requirements in IRC 6055 and 6056, and the “shared responsibility payments” in IRC 4980H that are calculated based on the IRC 6055 & 6056 filings. These shared responsibility payments in IRC 4980H are primarily intended to apply to businesses that drop all employee health insurance altogether, which would require their employees to go onto the public exchanges.

By contrast, all of the businesses challenging the preventive services mandate already offer health insurance that complies in all respects with the ACA, except for the HHS preventive services mandate. Thus, the delay in the reporting requirements and shared responsibility payments in IRC 4980H will not affect their lawsuits. They still face the HHS preventive services mandate (which is in 42 USC 300gg-13, and which the Treasury announcement does not mention) and if they do not comply with it, they still face the massive $100/day/employee excise taxes imposed by IRC 4980D, which is not mentioned by the Treasury announcement and which is governed by a completely different set of reporting requirements (in Treas. Reg. 54.6011-2).

Treasury has promised further guidance within the week, and it’s always possible that it will decide to delay the IRC 4980D excise tax penalties, too. But even then, the government would have a difficult time arguing that the for-profit cases are not ripe, because – as DOJ has repeatedly pointed out when explaining why the AIA does not bar these suits – the HHS mandate in 42 USC 300gg-13 is enforceable not just by the IRS but also by HHS, the Department of Labor, private citizens and (in some cases) the fifty states.

Thus, this situation is very different from the ripeness problems faced in the religious non-profit lawsuits. There, the administration delayed enforcement of the HHS mandate *and* proposed changes to the HHS regulations issued under 42 USC 300gg-13 as it would apply to religious non-profits (this is what was finalized on Friday). So, during the safe harbor, arguably the courts had no firm idea what the ultimate rule would even look like, and many reasoned from this that the lawsuits were not ripe.

Here, by contrast: (1) as to for-profits, the HHS preventive services mandate is final, and the administration has proposed no changes to it (in fact, on Friday, the administration reiterated what it’s always said, which is that for-profit businesses are going to get no accommodation whatsoever); and (2) as to for-profits, the key penalty (the $100/employee/day fine) has not been delayed. Thus, there is no ripeness problem, and the business lawsuits will proceed.

We’ve issued a <a href=" on the issue that provides additional detail.


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