Federal judge: Congress can continue using Obamacare’s small business exchange

Challenge from U.S. senator thrown out

White House press secretary Josh Earnest told reporters Tuesday that a federal appeals court ruling would have no "practical impact on [Americans'] ability to receive tax credits" to make health insurance more affordable through Obamacare right now.

Despite its size, Congress can continue buying health insurance through the new marketplaces intended for small businesses thanks to a federal court ruling Monday.

U.S. District Judge William Griesbach has dismissed a lawsuit from Sen. Ron Johnson (R-Wis.) challenging new rules that require federal lawmakers and their staff to purchase plans through the health care law’s new online insurance exchanges for small businesses.

Johnson, who filed the suit in January, argued that the Obama administration unfairly twisted the rules in the law to allow those working for a massive employer — Congress — to access plans and tax breaks that lawmakers had intended for small companies. Normally, the small-business exchanges are reserved for firms with fewer than 50 workers. All told, Congress employs upwards of 20,000 staffers.

In the first year, more than 12,000 congressional staffers signed up for coverage through the online marketplace run by the District of Columbia, representing more than 95 percent of the city’s enrollees on the small-business marketplace.

Johnson says the rule requires him to participate in a program he considers illegal and makes voters feel negatively about him for receiving benefits not available to the public.

“The Obama administration violated its own signature health care law by giving special treatment to members of Congress and their staffs,” he said in a statement.

Griesbach, who heard arguments on the case earlier this month, on Monday ruled that Johnson didn’t have grounds to sue, noting that the senator and his lawyers failed to show that voters would view him more negatively if his staff received subsidized coverage.

“Given that the plaintiffs receive, at worst, a benefit, they cannot claim to be injured under an equal protection theory,” Griesbach wrote in his decision.

Johnson responded to the decision in a statement, saying that “Americans increasingly — and correctly — believe that their government in Washington is out of control, out of touch and lawless. By its decision today, the court has chosen not to address the important constitutional issues at hand.”

The decision came one day before a ruling on a more pivotal component of the health care law went the other way.

On Tuesday morning, a federal appeals court panel in D.C. struck down some of the tax subsidies that are being used to make health insurance more affordable for millions of Americans. If upheld, the ruling could deal a crippling blow to the law, which already suffered a major setback earlier the month.

Follow J.D. Harrison and On Small Business on Twitter.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he runs the On Small Business blog.
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