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DC Court ruling supports Oklahoma claims of ACA illegalities

July 22, 2014

OKLAHOMA CITY – Attorney General Scott Pruitt on Tuesday said the legal claims made in 2011 in Oklahoma’s lawsuit challenging the implementation of the Affordable Care Act (ACA) were upheld Tuesday in a ruling by the DC Circuit Court of Appeals.

In September 2011, Oklahoma was the first to raise a legal challenge to the legality of an IRS rule that caused billions in illegal subsidies to be paid out, despite Congress having never authorized those payments. On Tuesday, a three-judge panel of the DC Circuit ruled 2-1 in favor of the challengers in Halbig v. Burwell. The private plaintiffs in that case filed a lawsuit in May 2013 that brought the same challenges made by Oklahoma in 2011.

“Early on, we recognized this major problem with how the Obama administration was implementing the Affordable Care Act,” Attorney General Pruitt said. “Other states and private plaintiffs like Halbig followed our lead in challenging the law and today’s ruling by the DC Circuit Court of Appeals is a victory for Oklahoma’s lawsuit and others challenging the law. Our lawsuit challenges the administration’s attempt to ‘fix’ the health care law through executive fiat. This ruling gives us great confidence that Oklahoma’s lawsuit will ultimately prevail.”

A decision in Oklahoma’s lawsuit is imminent. Oklahoma’s lawsuit is before a federal judge in the Eastern District of Oklahoma.

The state of Oklahoma is challenging an IRS rule regarding the legality of the subsidies and the assessment of tax penalties on “large employers.” The IRS is attempting to assess “large employer” penalties in states like Oklahoma that did not establish state health care exchanges, which contradicts the language of the ACA. The ACA states tax penalties are only to be assessed in states that set up state-based health care exchanges.

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