14 states file lawsuits against Obama’s health care bill, while the IRS are set to enforce it *
US health care: 14 states file lawsuits over Barack Obama’s reforms
In a sign of political battles to come, 14 US states filed lawsuits on Tuesday challenging the constitutionality of health care reform just moments after President Barack Obama signed it into law.
Other states are expected to join the fight against the far-reaching reforms which could place huge burdens on state budgets. Many are also considering legislation to block a provision which requires most people to buy insurance or pay a fine.
“This lawsuit should put the federal government on notice that Florida will not permit the constitutional rights of our citizens and the sovereignty of our state to be ignored or disregarded,” said Florida Attorney General Bill McCollum.
Mr McCollum, a Republican who is running for state governor in the upcoming election, said the federal government had no right to impose a “tax on living” by forcing people to buy insurance.
The lawsuit filed in a Florida federal court calls the reform bill an “unprecedented encroachment” on state sovereignty by requiring states to spend billions on expanding health care coverage to the poor.
“This is not a partisan issue,” he told reporters. “It’s a question for most of us in the states of the cost it is to our people and to the rights and freedoms of the individual citizens.”
McCollum was joined by the Republican attorneys general of Alabama, Colorado, Idaho, Michigan, Nebraska, Pennsylvania, South Carolina, South Dakota, Texas, Utah, and Washington, as well as the Democratic attorney general of Louisiana.
Virginia filed a separate suit on Tuesday asking a federal judge to invalidate the entire health care reform act because the federal government overstepped its authority in requiring people to buy health insurance.
“There has never been a point in our history where the federal government has been given the authority to require citizens to buy goods or services,” Virginia Attorney General Ken Cuccinelli said in a statement.
By Matt Cover
IRS to Enforce Health Reform
The Internal Revenue Service will function as the government’s chief enforcer for health care reform, should President Obama sign the bill into law as expected, monitoring both businesses and individuals to certify whether they have the insurance coverage the government requires.
The tax collection agency will be responsible for monitoring and enforcing compliance with the individual and employer insurance mandates which form the backbone of the Democrats’ hard-won reforms.
The bill states that the purpose of the mandates is to regulate “economic and financial decisions about how and when health care is paid for, and when health insurance is purchased.”
The mandates require that all Americans carry a minimum level of health insurance or pay a separate tax for every month they are without such coverage. All employers with 50 employers or more will also be required to provide their employees with that same minimum level of coverage.
While that minimum level of coverage will be defined at a later date by the Department of Health and Human Services, it will be the responsibility of the IRS to monitor individuals and employers and to punish those who do not comply.
Under the bill, which passed despite bipartisan opposition March 21, starting in 2014 the IRS would be responsible for monitoring which employers are complying with the mandate and which ones are not. The IRS would begin such monitoring of individuals’ health insurance status in 2014 as well.
The IRS would monitor individuals and businesses’ health insurance statuses through the mandatory reporting the bill requires. Under the law, every individual and most businesses are required to report to the IRS, on their tax returns, whether they have purchased or provided the required level of coverage and disclose to the IRS which months, if any, in which they failed to do so.
Using this information, the IRS would then determine whether an employer or individual falls under the mandate, which contains exceptions for religious conscience, hardship, incarcerated persons, and members of Indian tribes.
If either an individual or a business has failed to comply with this mandate for any month out of the year, they are required to pay a separate tax to the IRS. For individuals this is a maximum of $750 per person (up to $2,250 per household) and $750 per uncovered employee for businesses.
Because these penalties would each apply on a monthly basis, individuals and employers would have to pay 1/12th of the maximum penalties for each month they failed to comply with the mandates.
In order to carry out its new monitoring and enforcement duties, the Congressional Budget Office estimated that the IRS will need $10 billion in additional funds, funds which were not made available under the health reform bill.
“[T]he IRS could add more than 16,500 additional agents, auditors, examiners, and administrative support personnel to enforce large portions of the nation’s health insurance system,” the report said.
Because these new mandates and taxes are under the purview of the IRS, taxpayers and businesses could incur additional penalties normally reserved for normal income tax cheats, paying fees over and above those for not complying with Congress’ new mandates.
The IRS currently charges potentially hefty penalties for, among other things, filing false or fraudulent returns, filing late returns, and failure to pay a tax on time.
Taxpayers and businesses could be hit with these extra penalties because they are required to use their tax returns to prove to the IRS that they are complying with the mandates and because they will have to pay any tax penalties to that agency as well.