Cuccinelli Files in Support of Suit Against Obamacare Employer Penalty

Image: Cuccinelli Files in Support of Suit Against Obamacare Employer Penalty

Tuesday, 26 Nov 2013 05:01 PM

By Cathy Burke

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Virginia Attorney General Ken Cuccinelli filed a friend-of-the-court brief Tuesday in a federal case challenging the IRS's enforcement of Obamacare's employer mandate penalty, his office announced.

The filing in the U.S. District Court for the Eastern District of Virginia argues because Virginia is covered by the federally run Obamacare exchanges, a penalty on businesses that hire Virginia workers can't be enforced under the new healthcare law.

The penalty is a $2,000 or $3,000 per worker annual tax on employers with more than 50 staffers that don't offer government-approved health insurance. The workers can obtain health insurance through an online exchange.

But Cuccinelli — who ran an unsuccessful gubernatorial campaign based in part on his opposition to Obamacare — had advised against a state-run health insurance exchange under the Affordable Care Act.

A primary reason was to provide Virginia employers the opportunity to have a credible court defense if they decided not to pay the mandate.

"If the courts ultimately rule in our favor and determine that the federal government has to follow the law as it was actually written, Virginia's job creators can avoid a huge new $2,000 or $3,000 per employee annual tax, and our companies can instead invest that money to grow their businesses, hire new employees, and create needed jobs," the attorney general said.

Cuccinelli said the way the healthcare law was written by Congress, an employer penalty is only triggered in states with state-created exchanges.

"This is precisely why we pushed for a federally run exchange in Virginia instead of having the commonwealth run its own," Cuccinelli added. "We knew how the law was written, and no matter how hard the IRS tries to circumvent the law, only Congress can change it."

The case in Virginia, King v. Sebelius, is pending in federal court in Richmond.

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