JEFFERSON CITY, Mo., Dec. 2, 2014 – Yesterday, a bill was filed in the Missouri state senate that would suspend the licenses of insurance carriers who accept federal subsidies through the federally-run Obamacare exchange, potentially nullifying the ability of the federal government to carry out the mandate, or even operate the exchange in the state.
Introduced by newly-elected State Sen. Bob Onder, Senate Bill 51 (SB51) would strengthen initiatives already on the books in Missouri. “Missourians spoke loudly against Obamacare with over 71 percent voting in favor of the Health Care Freedom Act in 2010 and a majority voting to not allow the Governor to establish a state exchange in 2012,” said Onder. “During the 2014 elections, citizens of the 2nd Senatorial district in St. Charles County identified the continued fight against the implementation of Obamacare as a top priority. I believe this bill is yet another step in that direction.”
HOW THE BILL WOULD WORK
Under Obamacare, if a business doesn’t purchase a government-approved level of health benefits for its employees, some of those workers might be eligible to purchase subsidized coverage through a health insurance “exchange,” which, in Missouri, is operated by the federal government. From there, the IRS would give subsidies to the insurance companies on behalf of those workers, which triggers penalties against the employer. Businesses with 100 employees can face penalties as high as $140,000.
As is the controversy in a case known as Halbig v Burwell, Congress authorized those subsides, and therefore those penalties, only in states that establish a health insurance Exchange. For those states, like Missouri, that defer the exchange to the federal government, Obamacare provides that there are no subsidies and therefore no penalties against employers.
Unsurprisingly, the IRS has pushed ahead and will implement those subsidies in the 36 states that have refused to establish exchanges. SB51 would create a serious roadblock for the IRS if passed in Missouri.
In his paper, 50 Vetoes: How States Can Stop the Obama Health Care Law, Michael Cannon of the CATO Institute gives more details about how such legislation would work:
With such a law, states could block the IRS from imposing illegal taxes on its employers and residents, and even prevent the federal government from operating an Exchange within the state.