Attorney General Jackley Joins Challenge of Affordable Care Act’s Tax on South Dakota’s Insurance Health Plan
PIERRE, S.D. – Attorney General Marty Jackley has joined a challenge filed in the United States Court of Appeals for the Sixth Circuit by 16 Attorneys General. The brief supports the petition for rehearing en banc from a panel decision that allows the U.S. Department of Health and Human Services to extend the transitional reinsurance tax in the Affordable Care Act (ACA) to the States that operate self-insured group health insurance plans for government employees. The ACA requires “group health plans” to pay the transactional reinsurance tax. The Attorneys General argue this tax does not apply to the States.
“The federal government has no existing authority to impose this tax on our self- insured state health care plans. Imposing this tax forces the States to foot the bill for the federal government’s inaction and poor policy choices on healthcare. We will continue this fight to protect our citizens and our State budget from this unauthorized tax,” said Jackley.
The brief argues that in order to impose such a tax, Congress must make its intent to do so unmistakably clear. The States have a substantial interest in contesting federal taxes imposed directly on States where it is not clear Congress intended for States to pay the taxes. A strong clear statement rule in the taxation context provides States much-needed protection from federal regulation that upsets the traditional federal- state balance. “There is no clear statement in the ACA that Congress intended to impose this transitional tax on the States,” said Jackley.
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