What Happens If Boehner’s Lawsuit Succeeds?

Experts are split over whether Obamacare delays were legal.

Speaker of the House John Boehner, R-Ohio, answers questions during his weekly news conference on Capitol Hill, May 8, 2014 in Washington, D.C.
National Journal
Sam Baker
July 17, 2014, 1 a.m.

House Re­pub­lic­ans might have a point about Obama­care’s em­ploy­er man­date — they just can’t do much about it by su­ing the pres­id­ent.

The House is plan­ning to sue Pres­id­ent Obama (and, more to the point, the IRS) over delays in the health care law’s em­ploy­er man­date. It took the first of­fi­cial step in that dir­ec­tion Wed­nes­day, with a hear­ing in the House Rules Com­mit­tee over a res­ol­u­tion to au­thor­ize the law­suit.

As a whole, the leg­al world is pretty skep­tic­al of House Re­pub­lic­ans’ plan, largely be­cause leg­al ex­perts from both sides of the aisle doubt the House can clear a key pro­ced­ur­al hurdle.

But what if it can? Leg­al ex­perts are much more di­vided over the strength of the un­der­ly­ing case against the ad­min­is­tra­tion’s delays. Even some al­lies of the Af­ford­able Care Act say Re­pub­lic­ans have a sol­id ar­gu­ment that the delays were il­leg­al, while oth­ers fear the case could strip fu­ture pres­id­ents of ba­sic powers.

“I think it would make gov­ern­ment un­work­able,” said Si­mon Laz­arus, seni­or coun­sel at the lib­er­al Con­sti­tu­tion­al Ac­count­ab­il­ity Cen­ter.

Laz­arus said delays in the em­ploy­er man­date are no dif­fer­ent from any oth­er ad­min­is­trat­ive delay in im­ple­ment­ing new laws, which are myri­ad. The Su­preme Court has pre­vi­ously ruled that fed­er­al agen­cies can use their own dis­cre­tion about how they al­loc­ate their fi­nite re­sources, and agen­cies are also gen­er­ally able to phase in new re­quire­ments as a way of mak­ing life easi­er for reg­u­lated in­dus­tries and tax­pay­ers.

Ar­guing that Obama didn’t have the au­thor­ity to delay the em­ploy­er man­date would im­plic­ate a host of oth­er delays, Laz­arus said.

He poin­ted to past in­stances in which the IRS has offered “trans­ition re­lief” to phase in new re­port­ing re­quire­ments. The En­vir­on­ment­al Pro­tec­tion Agency has also slowed the re­lease of new reg­u­la­tions while it gathered more sci­entif­ic evid­ence and gave reg­u­lated in­dus­tries more time to come in­to com­pli­ance — delays that be­nefited the busi­ness in­terests with whom Re­pub­lic­ans are tra­di­tion­ally aligned.

“I don’t read­ily see a way of dis­tin­guish­ing all of those things,” Laz­arus said.

But oth­ers aren’t so sure.

Nich­olas Bagley, a law pro­fess­or at the Uni­versity of Michigan, said Boehner’s un­der­ly­ing com­plaint about em­ploy­er-man­date delays seems to have some mer­it. Past ex­amples of “en­force­ment dis­cre­tion” aren’t quite com­par­able to delays in the em­ploy­er man­date, he said.

Bagley drew a dis­tinc­tion between agen­cies fail­ing to meet their own dead­lines versus ig­nor­ing stat­utory re­quire­ments.

The Af­ford­able Care Act said em­ploy­ers have to provide health in­sur­ance to their em­ploy­ees or pay a fine, and that re­quire­ment took ef­fect Jan. 1, 2014. So, as crit­ics of the delays see it, a tax li­ab­il­ity kicked in Jan. 1 and is in place today, even if the IRS isn’t en­for­cing it.

The reg­u­la­tions EPA slow-walked didn’t work that way, Bagley said: There, Con­gress dir­ec­ted the agency to write reg­u­la­tions, and new en­vir­on­ment­al stand­ards didn’t take ef­fect un­til those reg­u­la­tions were is­sued. So, while it’s true that EPA missed Con­gress’s dead­lines, it was a dead­line im­posed on EPA — not on the people EPA reg­u­lates.

“There’s a big dif­fer­ence between an agency fail­ing to hit a dead­line for do­ing something on its own “¦ and it’s an­oth­er thing al­to­geth­er for an agency to waive a dead­line for private in­di­vidu­als,” Bagley said.

Laz­arus, on the oth­er hand, said the GOP is over­sell­ing the ad­min­is­tra­tion’s ac­tions. If it had said it nev­er in­ten­ded to im­ple­ment a policy Con­gress passed, sure, that would be il­leg­al, he said. But this was simply a delay — one de­signed to make sure the policy could be im­ple­men­ted well, in the long run.

“This is not a re­fus­al to en­force, or a de­cision not to en­force,” he said. “It is a de­cision about phas­ing in en­force­ment.”

The IRS has delayed the em­ploy­er man­date twice. The first one, an­nounced in 2013, was an across-the-board delay, for every­one, de­signed to give em­ploy­ers more time to come in­to com­pli­ance with the new policy and to up­date their re­cord-keep­ing sys­tems.

And the White House ap­peared to give it­self some leg­al wiggle room on that delay. It tech­nic­ally only delayed a re­port­ing re­quire­ment for em­ploy­ers, which wasn’t tied to the Jan. 1 dead­line. That delay made the man­date it­self un­en­force­able, but by the let­ter of the law, it didn’t con­flict with a stat­utory dead­line.

Bagley said he’s skep­tic­al of that ra­tionale — trans­ition re­lief is de­signed to give a reg­u­lated group more time to come in­to com­pli­ance, and the em­ploy­er man­date had been on the books for three years by the time it was first delayed. But it’s an ar­gu­ment the ad­min­is­tra­tion could make.

The second delay is harder to jus­ti­fy, at least us­ing the tra­di­tion­al ra­tionale for trans­ition re­lief, Bagley said. Earli­er this year, the White House said it would delay en­force­ment un­til 2016 for mid­sized em­ploy­ers. Lar­ger firms have to com­ply in 2015, but they have to cov­er only 70 per­cent of their full-time work­ers that year, and 90 per­cent after that, to avoid pen­al­ties. The law it­self calls for 100 per­cent cov­er­age.

Al­low­ing em­ploy­ers to cov­er few­er em­ploy­ees doesn’t seem like a plaus­ible re­sponse to re­port­ing or re­cord-keep­ing re­quire­ments, Bagley said.

“The second round of delays, it’s ex­tremely dif­fi­cult to see how they could be jus­ti­fied on that basis,” he said.

In short, Boehner might be onto something — if Con­gress im­posed a spe­cif­ic tax li­ab­il­ity on a spe­cif­ic date, and the IRS simply isn’t en­for­cing it for two years, and then only part of the way, there’s at least an ar­gu­ment to be made that the delays aren’t leg­al, Bagley said.

But that doesn’t mean Boehner’s law­suit will ac­com­plish much.

For starters, by the time it works its way through the courts, the em­ploy­er man­date will prob­ably be in ef­fect.

Wal­ter Del­linger, a former act­ing so­li­cit­or gen­er­al, test­i­fied Wed­nes­day that he didn’t think the case could make it to the Su­preme Court be­fore early 2016, mean­ing a rul­ing wouldn’t come be­fore June 2016. The man­date would already be in ef­fect by then, as­sum­ing it isn’t delayed fur­ther, so a rul­ing or­der­ing the IRS to im­ple­ment it wouldn’t be es­pe­cially sig­ni­fic­ant.

(Plus, Re­pub­lic­ans will pre­sum­ably be more fo­cused on Hil­lary Clin­ton by then and less mo­tiv­ated to im­peach Obama, which is what this is about in the first place.)

And that’s as­sum­ing the law­suit can ac­tu­ally make it through the courts, which is a long shot. Al­though Bagley is skep­tic­al of the man­date delays, he says it’s un­am­bigu­ously clear that the House doesn’t have the leg­al stand­ing to sue Obama. The case should be dis­missed without a rul­ing on the delays’ leg­al­ity, he said.

Del­linger and Laz­arus also test­i­fied Wed­nes­day that the House lacks stand­ing. Del­linger warned that a de­cision al­low­ing this law­suit to pro­ceed would open the floodgates for Con­gress and the pres­id­ent to take their polit­ic­al dis­putes to court — something the Su­preme Court has act­ively tried to avoid.

Some con­ser­vat­ives agree on the stand­ing is­sue.

“I think that makes it a dif­fi­cult case; “¦ it’s not clear how a dis­pute over en­force­ment of the law ne­ces­sar­ily in­jures the House,” said Jonath­an Adler, a law pro­fess­or at Case West­ern Re­serve Uni­versity.

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