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The Obamacare challenge that won’t die

Back in 2010, Sen. Charles E. Grassley proposed a minor amendment to a massive health care bill, requiring that federal lawmakers and their staffs start buying coverage through new insurance marketplaces that would – if the legislation ever passed – be set up by the government.

In doing so, the Iowa Republican set into motion a strange series of events, entangling both city and federal officials in Washington, triggering one of the most stubbornly resilient legal challenges to the Affordable Care Act, and ultimately giving rise to a bizarre question: Can Congress be considered a small business?

In the latest chapter of the saga, Sen. David Vitter (R-La.), chairman of the Senate Small Business and Entrepreneurship Committee, has opened an investigation into those rules, which have resulted in members of Congress and their employees buying health plans through a new online marketplace otherwise reserved for (and offering subsidies to) small businesses in the District of Columbia. Vitter’s probe is now holding up the confirmation process for a key federal official.

The law’s supporters say the investigation – which comes as the Supreme Court prepares to hear a pivotal challenge to the law this spring – is merely another attempt by critics to undermine the health care overhaul by attacking areas where the intent and the letter of the law don’t line up perfectly. Vitter says he is working to undo a so-called exemption that gives lawmakers special privileges not extended to other Americans.

“There’s a real contrast between the burdens faced by small businesses under the law and this Washington exemption,” Vitter said in a recent interview.

His latest probe starts with a search for Hill staffers who signed and submitted documents certifying that Congress is a small business that employs less than 100 workers. But the entire ordeal really dates back to Grassley’s fateful amendment.

During the debate over the Affordable Care Act, Grassley argued that if the legislation was so spectacular, Democrats in Congress should be willing to purchase their own health plans through the bill’s online marketplaces. When he introduced the proposal, it was intended to make supporters think twice about backing the bill. Instead, Democrats embraced the amendment, which found its way into the final version of the bill that was signed into law.

Problem is, the legislation called on states to build only two types of online insurance portals: one for individuals and families, and one for small businesses with fewer than 50 employees. Of course, as an employer, Congress fits into neither bucket. That posed a real problem for the Obama administration, which needed a way to adhere to the letter of the law but allow the government to continue contributing toward federal workers’ health costs.

The workaround? The Office of Personnel Management in 2013 issued rules directing lawmakers and their staffs to purchase plans through the new small business exchange erected by the District of Columbia. On that small business portal, the federal government would have a means – along with other employers in the city – to cover a portion of each employees’ health insurance bill, as it always had.

So far, so good. During the first year, more than 12,000 lawmakers and congressional staffers purchased plans through D.C.’s small businesses insurance marketplace, representing more than 95 percent of the the small-business site’s first-year enrollment.

Here’s where the second problem arises. By law, only employers with less than 50 workers are permitted to buy plans through that small business marketplace. All told, the House and Senate employ about 20,000 people. In other words, OPM had issued rules that contradicted the legislation.

That led to the first legal challenge related to the rule. Sen. Ron Johnson (R-Wisc.) last year argued in federal court that the Obama administration had unjustly twisted the rules to provide lawmakers with perks intended for small companies, not Congress. He said the rule forces him to participate in a scheme that he considers illegal. A U.S. District judge later dismissed the case, however, stating that Johnson failed to show that any harm would come to him as a result of OPM’s workaround.

It didn’t end there. Conservative group Judicial Watch revived the challenge less than a year later by filing Freedom of Information Act requests for documents linked to the congressional health insurance enrollment process. The group discovered that on applications to sign up for plans through D.C.’s exchange, Senate and House of Representatives staffers wrote (and D.C. officials later certified) that each chamber of Congress employs exactly 45 people – off, of course, by a proverbial mile.

That resulted in a second lawsuit last fall, this one in D.C. Superior Court, in which Judicial Watch’s attorneys argued that city health officials fraudulently authorized Congress to buy plans through the small-business site. Legal filings show that D.C. health officials later acknowledged that the numbers were in fact misstated and that “Congress does not fall within the definition of a small employer.”

The end? Not quite.

Despite the admission, the city maintained that the ruling by OPM trumped D.C. laws stemming from the Affordable Care Act. Consequently, the rule remained in place.

Once again, it seemed the matter had been put to bed – until Vitter breathed new life into the fight last month. Shifting the focus of his investigation back to the federal government, Vitter has launched a hunt in search for the Senate and House staffers who stated that the chambers employed 45 people. On the forms obtained by Judicial Watch, the names and signatures were redacted.

“Someone within Congress knowingly falsified information in order for Congress to keep their Obamacare subsidy,” Vitter wrote in a letter sent earlier this month the House clerk, the Senate’s financial clerk and the D.C. Health Benefit Exchange Authority. “We need to know who, immediately, so we can fix this injustice and eliminate the unfair practice.”

Vitter, who has announced plans to run for governor of Louisiana this fall, has asked those offices to hand over the names and explain how exactly the current arrangement was put in place. Until then, he has pledged to block the confirmation of the federal personnel management’s newly nominated deputy director, Early Gay. It’s worth noting that OPM has been without a second-in-command for three years, one of the longest-ever vacancies for president-appointed position.

“For Mr. Gay’s nomination to move forward, I require thorough and complete answers to each of my requests,” Vitter said.

House, Senate and D.C. Health Benefits Exchange Authority responded to his letter last week, but none disclosed the names or other related information the senator was seeking – thus extending the saga for at least a little while longer.

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