Feb 11 The Obama administration may have pushed
the bounds of its legal authority by delaying the healthcare law
requirement that certain employers provide coverage to full-time
workers, but the move will be tough to challenge in court,
according to legal experts.
The so-called employer mandate was originally supposed to
take effect in January under the Patient Protection and
Affordable Care Act, known as Obamacare. But in the middle of
last year, the administration granted a one-year delay to
Then, on Monday, the administration announced that
medium-size businesses, with 50 to 99 full-time workers, would
not have to comply with the requirement until 2016. Also, larger
employers would be able to phase in coverage by offering a
health plan to only 70 percent of their full-time workforce next
year, rising to 95 percent in 2016.
Firms with fewer than 50 full-time workers are not required
to provide coverage under the law.
Delays beyond January 2014 may have exceeded the
administration's authority, according to legal experts, because
when Congress passed the Affordable Care Act of 2010 it stated
that the employer mandate would apply after Dec. 31, 2013.
The administration has taken "a legally shaky position,"
said Nicholas Bagley, a law professor at the University of
Michigan who specializes in administrative and health law.
"Extending the delay even to a portion of plans for a second
year is pushing legal boundaries even harder."
Legal experts said, however, they could not think of anyone
who would have the standing to sue. At least two lawsuits have
already been filed over delays to the employer coverage
requirements, one of which was dismissed in January.
The delay is the latest in a string of last-minute
exemptions and extensions the Obama administration has made in
rolling out the healthcare law. Monday's adjustment sparked
renewed calls from congressional Republicans to postpone the
so-called individual mandate, which requires most Americans to
enroll in coverage by March 31 or pay a penalty in their 2014
"Nothing in the statute justifies this ad hoc suspension and
delay," said Jonathan Adler, an administrative law expert at
Case Western Reserve University who has publicly criticized the
healthcare law's rollout.
Unlike the individual mandate, which allows the
administration to grant waivers for individuals suffering a
hardship, the employer mandate has no such exemption, he said.
But the U.S. Treasury Department said in an email that the
latest action was an exercise of its longstanding authority to
grant transitional relief when implementing new legislation, as
provided by the Internal Revenue Code.
"There certainly are arguments that this is legal," said
Timothy Jost, a health law professor at Washington and Lee
While some courts have held that a specific deadline in a
statute must be met, he said, other courts have said that a
statutory deadline is just one factor to consider in determining
whether a delay is reasonable.
Legal experts said, however, it would be difficult for any
group or individual to show that they have the legal standing to
challenge the delay in court.
"No single individual is concretely and particularly injured
by the governmental action, and that's a requirement to get into
federal court," said Bagley.
Adler said that while an employer with more than 99
employees that does not qualify for the latest delay could try
to sue, he would face an uphill battle.
"It's always harder to claim that your misery is about
somebody else being treated better than you," Adler said.
At least two groups have already filed lawsuits against the
administration's initial one-year delay of the employer mandate
announced in July.
One lawsuit was filed by a conservative watchdog group,
Judicial Watch, on behalf of Kawa Orthodontics, a Boca Raton,
Florida-based orthodontics practice with more than 70 full-time
employees. In its complaint, Kawa said it had been harmed by the
delay, having spent significant time and money, including legal
fees, to prepare for the employer mandate to take effect in
The U.S. district court in Florida dismissed that lawsuit on
Jan. 13, finding that Kawa did not have standing because it had
not suffered a "concrete injury." Kawa has appealed to the 11th
Circuit Court of Appeals.
Another lawsuit is pending in federal court in Wisconsin,
brought by the Association of American Physicians and Surgeons,
a libertarian physicians group.
The association says most of its members have cash practices
that depend on patients paying out-of-pocket for healthcare
services. By enforcing the individual mandate while it delays
the employer mandate, the Obama administration is shifting the
insurance burden onto individuals and reducing the number of
patients willing to pay cash, the group contends.
"The law says that the employer mandate must go into effect
the same time as the individual mandate," said Andrew Schlafly,
a lawyer for the physicians group. "Only Congress can change the