Indiana’s challenge to IRS and ACA move forward

Indiana Attorney General Greg Zoeller is moving forward with a lawsuit against the Internal Revenue Service after US District Judge William T. Lawrence denied a dismissal of the suit by the IRS.

Indiana is joined by 39 school public school districts facing millions of dollars in fines, fees, and penalties if they don’t cover all of their workforce. Because school districts tend to have hundreds of employees and don’t fall into the category of “small business”, if any of their full-time employees like teacher’s aides, custodians, or other non-insured support staff purchase insurance through an exchange, they will likely trigger IRS penalties under the ACA.

IRS rules dictate that if just one of those employees in a district gets their insurance from the Exchange and receives a federal subsidy, the district is penalized for having not covered the employee. Statewide this could cost Indiana districts millions of dollars.

While this portion of the case is moving forward, Indiana has lost claims regarding federal infringement, state’s rights, and its sovereignty after the US Supreme Court ruled the Congress has the power to establish the ACA through its taxing authority.

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