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Ohio calls PPACA tax illegal in new suit

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(Bloomberg) — The Patient Protection and Affordable Care Act of 2010 (PPACA) has illegally forced Ohio and its local governments to pay more than $5.3 million in taxes, the state said in a new lawsuit seeking to chip away at the law.

The state said in a complaint filed on Monday in federal court in Columbus that the PPACA reinsurance program  —  one of the PPACA “three R’s” risk-management programs  — improperly imposes a three-year assessment on Ohio, Ohio counties and Ohio public colleges. Ohio claims the U.S. has no right to tax states and local governments.

See also: What to know about the insurers’ PPACA safety padding.

“The tax assessment by the Obama administration is an unprecedented attempt to destroy the balance of authority between the federal government and the states,” Ohio Attorney General Mike DeWine said in a statement.

The suit is the latest seeking to kill or change PPACA. The U.S. Supreme Court in 2012 said Congress may require individuals to buy insurance or face a tax while it also upheld the right of states not to expand Medicaid insurance for the poor.

Last year, the Supreme Court said companies may opt out of a provision requiring them to provide contraception coverage based on religious beliefs. In November, the Supreme Court agreed to review a Virginia challenge to a provision aimed at increasing enrollment by offering taxpayer subsidies.

The state’s lawsuit was joined by Warren County and four public universities. According to the complaint, the provision at issue illegally requires government entities that provide self-insured group-health plans to pay a three-year reinsurance tax.

Nicole Navas, a spokeswoman for the U.S. Justice Department, didn’t immediately respond to a phone message seeking comment on the suit.

The case is State of Ohio v. U.S., 15-cv-00321, U.S. District Court, Southern District of Ohio (Columbus).

See also: IRS posts instructions for PPACA health insurer tax.


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