PAUL L. FRIEDMAN, United States District Judge
On May 23, 2012, the Internal Revenue Service issued a final rule implementing the premium tax credit provision of the Patient Protection and Affordable Care Act (the "ACA" or "Act"). In its final rule, the IRS interpreted the ACA as authorizing the agency to grant tax credits to certain individuals who purchase insurance on either a state-run health insurance "Exchange" or a federally-facilitated "Exchange." Plaintiffs contend that this interpretation is contrary to the statute, which, they assert, authorizes tax credits only for individuals who purchase insurance on state-run Exchanges. Plaintiffs therefore assert that the rule promulgated by the IRS exceeds the agency's statutory authority and is arbitrary, capricious, and contrary to law, in violation of the Administrative Procedure Act.
This matter is now before the Court on the parties' cross-motions for summary judgment. The Court heard oral argument on the motions on December 3, 2013. After careful consideration of the parties' papers and attached exhibits, the Act and other relevant legal authorities, the regulations promulgated by the IRS, and the oral arguments presented by counsel in open court, the Court will grant the defendants' motion, deny the plaintiffs' motion, and enter judgment for the defendants.
On March 23, 2010, Congress enacted the Patient Protection and Affordable Care Act, Pub.L. No. 111-148, 124 Stat.
At issue in this case is whether the ACA allows the IRS to provide tax credits to residents of states that declined to establish their own health insurance Exchanges, that is, in states where the federal government has stepped in and is running the Exchange. Because this dispute necessitates a careful examination of certain features of the ACA — in particular, the Exchanges, the Section 36B tax credits, the minimum insurance requirement for individuals, and the Section 4980H assessment imposed on some employers — these features are described in more detail below.
The ACA provides for the establishment of American Health Benefit Exchanges, or "Exchanges," to facilitate the purchase of health insurance by private individuals and small businesses. See 42 U.S.C. § 18031(b)(1); 42 U.S.C. § 300gg-91(d)(21). The Department of Health and Human Services ("HHS") has described an Exchange as "a mechanism for organizing the health insurance marketplace to help consumers and small businesses shop for coverage in a way that permits easy comparison of available plan options based on price, benefits and services, and quality." Centers for Medicare & Medicaid Services, Initial Guidance to States on Exchanges, http://www.hhs.gov/cciio/resources/files/ guidance_to_states_on_exchanges.html (visited Jan. 5, 2014); see also H.R. Rep. No. 111-443, pt. II, at 976 (March 17, 2010) (describing an Exchange as "an organized and transparent `marketplace for the purchase of health insurance' where individuals and employees (phased-in over time) can shop and compare health insurance options") (internal quotation omitted).
Each health insurance plan offered through an Exchange must provide certain minimum benefits, as set forth in regulations promulgated by HHS. 42 U.S.C. §§ 18021(a)(1), 18022. In addition to serving as a marketplace for health insurance, an Exchange can determine an individual's eligibility to obtain an advance payment of a federal premium tax credit and his or her eligibility to be deemed exempt from the individual minimum coverage requirement. See 42 U.S.C. § 18031(d)(4).
The Act authorizes tax credits for many low- and middle-income individuals who purchase health insurance through the Exchanges. The Exchanges administer a program to provide advance payments of tax credits for eligible individuals; where an advance payment is approved, the Exchange arranges for the payment to be made directly to the individual's insurer, lowering the net cost of insurance to the individual. 42 U.S.C. §§ 18081-18082. The section of the Act setting forth how this tax credit is determined — ACA § 1401, codified at 26 U.S.C. § 36B — calculates this credit based in part on the premium expenses for the health plan "enrolled in [by the individual] through an Exchange established by the State under [42 U.S.C. § 18031]." 26 U.S.C. § 36B(b)(2)(A); see also 26 U.S.C. § 36B(c)(2)(A)(i).
As an example, amicus Families USA calculates that a single parent with two children in Florida, earning $41,000, would likely be charged about $5700 per year for a "silver-level" insurance plan on the federally-facilitated Exchange operating in that state. If the tax credit is available, the family would pay approximately $2700 for this insurance, after receiving a tax credit of about $3000. If the tax credit is unavailable, the family would bear the full cost of health insurance. Brief of Amicus Curiae Families USA 7 (citing Kaiser Family Foundation, Subsidy Calculator, available at http://kff.org/interactive/ subsidy-calculator).
Under the Act, most individuals must obtain health insurance or face a tax penalty imposed by the IRS. This penalty in 2014 is one percent of an individual's yearly income or $95 for the year, whichever is higher, 26 U.S.C. § 5000A(c)(2)-(3), but it "cannot exceed the cost of `the national average premium for qualified health plans' meeting a certain level of coverage." Liberty Univ., Inc. v. Lew, 733 F.3d 72, 84 (4th Cir.2013) (quoting 26 U.S.C. § 5000A(c)(1)(B)). Individuals unable to afford coverage, however, are exempt from the minimum insurance requirement, and therefore can avoid the tax penalty. 26 U.S.C. § 5000A(e). The unaffordability exemption generally is available to an individual whose health insurance costs exceed eight percent of his or her annual household income. 26 U.S.C. § 5000A(e)(1)(A). An individual's costs are determined with reference to the price of the relevant insurance premium minus the tax credit described
Under the ACA, many or most employers are expected to offer health insurance plans to their employees, and large employers who do not offer affordable health insurance coverage to their full-time employees are subject to an "assessable payment" or tax under 26 U.S.C. § 4980H. Imposition of the Section 4980H assessment is triggered when a full-time employee purchases subsidized coverage on an Exchange. 26 U.S.C. § 4980H(a)-(b). After an employee purchases insurance, the Exchange determines whether the employer failed to offer affordable health insurance to that employee. If so, and if the employee meets the income requirements and other criteria, the employee will be deemed eligible for a premium tax credit. The Exchange then notifies the employer that the employer will be assessed a Section 4980H payment. 26 U.S.C. § 4980H(d). The employer has the opportunity to administratively appeal that notice. 26 U.S.C. § 18081(f)(2).
The Internal Revenue Service has promulgated regulations making the premium tax credit available to qualifying individuals who purchase health insurance on state-run or federally-facilitated Exchanges. See 26 C.F.R. § 1.36B-1(k); Health Insurance Premium Tax Credit, 77 Fed.Reg. 30,377, 30,378 (May 23, 2012) (the "IRS Rule"). Specifically, 26 C.F.R. § 1.36B-2(a)(1) provides that an applicable taxpayer who meets certain other criteria is allowed a tax credit if he or she, or a member of his or her family, "[i]s enrolled in one or more qualified health plans through an Exchange." 26 C.F.R. § 1.36B-1(k) provides that the term Exchange "has the same meaning as in 45 C.F.R. § 155.20," which in turn defines Exchange in the following manner:
45 C.F.R. § 155.20 (emphasis added). Participants in federally-facilitated Exchanges thus are eligible for the premium tax credit under the IRS Rule.
In describing the Rule, the IRS noted that "[c]ommentators disagreed on whether the language in [26 U.S.C. §] 36B(b)(2)(A) limits the availability of the premium tax credit only to taxpayers who enroll in qualified health plans on State Exchanges." 77 Fed.Reg. at 30,378. The IRS rejected such a limitation, explaining:
Id.
Plaintiffs are a group of individuals and employers residing in states that have declined to establish Exchanges.
Plaintiffs contend that 26 C.F.R. § 1.36B-1(k) and related regulations violate the plain language of the ACA, which provides that an individual's tax credit is calculated based on the cost of insurance purchased on "an Exchange established by the State under [42 U.S.C. § 18031]." 26 U.S.C. § 36B(b)(2)(A). Plaintiffs argue that the regulations exceed the scope of the agency's statutory authority and are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," in violation of the Administrative Procedure Act, and they therefore must be set aside. 5 U.S.C. § 706(2)(A), (C); see Compl. ¶¶ 37, 40. Plaintiffs also contend that the agency's explanation for its interpretation of the statute is "arbitrary, capricious, unsupported by a reasoned basis, and contrary to law." Compl. ¶ 41.
Plaintiffs filed this action on May 2, 2013, naming as defendants HHS, the Department of the Treasury ("Treasury"), and the IRS, as well as the heads of those agencies. After serving defendants, plaintiffs promptly moved for summary judgment, and defendants filed a motion to dismiss. Briefing on plaintiffs' summary judgment motion was stayed pending a decision on defendants' motion to dismiss. In their motion to dismiss, the defendants argued that plaintiffs lacked standing; that their claims were not ripe; that this suit was precluded by the Anti-Injunction Act and other statutes; and that the case must be dismissed for failure to join indispensable parties. Plaintiffs in turn filed a motion for a preliminary injunction. For the reasons stated in open court on October 22, 2013, the Court denied plaintiffs' motion for preliminary injunction on the ground that plaintiffs had failed to establish risk of irreparable harm. The Court also denied the defendants' motion to dismiss, with leave to renew their justiciability challenges at the summary judgment stage.
Briefing on plaintiffs' summary judgment motion resumed, and defendants filed a cross-motion for summary judgment. These motions are now ripe for decision.
Defendants urge this Court to dismiss plaintiffs' claims on various jurisdictional and prudential grounds. Defendants argue that the individual plaintiffs lack Article III standing and that their suit is barred by a provision of the Administrative Procedure Act, 5 U.S.C. § 704. Defendants raise similar challenges against the employer plaintiffs. In addition, defendants assert that the employer plaintiffs' claims are precluded by the Anti-Injunction Act, 26 U.S.C. § 7421(a), and by prudential standing principles. The Court rejects defendants' arguments as to the
The defendants previously argued in their motion to dismiss that the individual plaintiffs lacked Article III standing, and the Court rejected this argument in its oral ruling on October 22, 2013. See Oct. 22, 2013 Tr. 13-18. The Court concluded that at least one individual plaintiff, David Klemencic, had adequately shown economic injury likely to result from the IRS Rule. Id. The defendants have renewed their challenge here, and the Court rejects this challenge for identical reasons.
In order to establish standing under Article III of the United States Constitution, a plaintiff must show, at an "irreducible constitutional minimum," that (1) he or she has suffered an injury-in-fact — i.e., the invasion of a legally protected interest; (2) the injury is fairly traceable to the defendants' conduct (a causal connection); and (3) a favorable decision on the merits likely will redress the injury. Sprint Commc'ns Co., L.P. v. APCC Servs., Inc., 554 U.S. 269, 273-74, 128 S.Ct. 2531, 171 L.Ed.2d 424 (2008) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)).
David Klemencic is one of four individual plaintiffs in this suit.
The effect of the IRS Rule, however, is that the tax credit available to Mr. Klemencic lowers the cost of his insurance premiums so significantly that he no longer qualifies for the unaffordability exemption. See Kessler Decl. ¶ 22; Klemencic Decl. ¶ 7. The Rule thereby places Klemencic in a position where he has to purchase subsidized health insurance, estimated at approximately $20 per year, see Third Moulds Decl. ¶ 6, or he will have to pay some higher amount per year as a Section 5000A tax penalty. Counterintuitively, by making health insurance more affordable, the IRS Rule imposes a financial cost on Klemencic.
Although the economic injury is rather small, defendants cite no authority that suggests that the amount at issue — only about $1.70 per month, or $20 per year — is too small to establish injury-in-fact for jurisdictional purposes. Mr. Klemencic's economic injury, albeit a non-intuitive one, meets the requirements for Article III standing. It is "concrete, particularized, and actual or imminent; fairly traceable to
As noted, plaintiffs bring suit under the Administrative Procedure Act, which provides a "generic cause of action in favor of persons aggrieved by agency action." Cohen v. United States, 650 F.3d 717, 723 (D.C.Cir.2011) (en banc) (quoting Maryland Dep't of Human Res. v. Dep't of Health & Human Servs., 763 F.2d 1441, 1445 n.1 (D.C.Cir.1985)). The APA permits judicial review of any "[a]gency action made reviewable by statute," as well as any "final agency action for which there is no other adequate remedy in a court." 5 U.S.C. § 704 (emphasis added). Section 704 thus excludes from APA review those agency actions for which there are alternative judicial remedies in place. As the Supreme Court has explained:
Bowen v. Massachusetts, 487 U.S. 879, 903, 108 S.Ct. 2722, 101 L.Ed.2d 749 (1988) (footnotes omitted).
The APA thus "does not provide additional judicial remedies in situations where the Congress has provided special and adequate review procedures." Bowen v. Massachusetts, 487 U.S. at 903, 108 S.Ct. 2722 (quoting Attorney General's Manual on the Administrative Procedure Act 101 (1947)). Instead, where Congress already has created a separate cause of action for review of agency action, "[t]he form of proceeding for judicial review is the special statutory review proceeding relevant to the subject matter in a court specified by statute" unless that proceeding is "inadequat[e]." 5 U.S.C. § 703.
Although Section 704 disallows APA review of agency actions when other, adequate remedies are provided by statute, the Supreme Court has noted that this provision "should not be construed to defeat the central purpose of providing a broad spectrum of judicial review of agency action." Bowen v. Massachusetts, 487 U.S. at 903, 108 S.Ct. 2722. Therefore, when determining whether alternative remedies are adequate, "the court must give the APA `a hospitable interpretation' such that `only upon a showing of clear and convincing evidence of a contrary legislative intent should the courts restrict access to judicial review.'" Garcia v. Vilsack, 563 F.3d 519, 523 (D.C.Cir.2009) (quoting El Rio Santa Cruz Neighborhood Health Ctr. v. U.S. Dep't of Health & Human Servs., 396 F.3d 1265, 1272 (D.C.Cir.2005) (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 141, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967))).
Defendants assert that a special, time-honored statutory procedure exists for challenges to IRS actions: the tax refund suit. 28 U.S.C. § 1346 provides that a district court has original jurisdiction of "[a]ny civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously
The parties agree that the critical question is whether the tax refund suit provides an adequate judicial remedy in this case. See Cohen v. United States, 650 F.3d at 731. In some respects, the tax refund suit clearly provides a path to a potential remedy. If plaintiffs forego purchasing insurance and face a higher tax burden as a penalty, they will be able to pay the tax and then bring a refund suit under 26 U.S.C. § 7422, like any other taxpayer. If plaintiffs prevail on their challenge in a tax refund suit, they will be entitled to repayment in full, plus interest, of any overpayment. 26 U.S.C. § 7422; see 28 U.S.C. § 2411 (authorizing payment of interest).
But in other ways, the tax refund mechanism is inferior to an APA suit and fails to provide complete relief to these plaintiffs. Relegating plaintiffs' claims to a tax refund action would force plaintiffs to make a choice between purchasing insurance, thereby waiving their claims, or foregoing insurance and incurring the tax penalty, which they will recover much later, and only if they prevail. They also will be deprived of the opportunity to obtain prospective certificates of exemption. See 45 C.F.R. § 155.605(g)(2). Such certificates provide a safe harbor to an individual who can establish that he or she likely will meet the requirements of the unaffordability exemption for that tax year; such certificates guarantee that individuals will avoid the tax penalty "notwithstanding any change in an individual's circumstances," such as an unexpected increase in income. 45 C.F.R. § 155.605(g)(2)(vi).
Defendants argue that the tax refund suit is adequate because it is a de novo proceeding. See Democratic Leadership Council v. United States, 542 F.Supp.2d 63, 70 (D.D.C.2008) (tax refund actions are de novo proceedings). When that proceeding occurs is irrelevant, according to defendants. As the D.C. Circuit explained in Garcia, "relief will be deemed adequate `where a statute affords an opportunity for de novo district-court review,'" as "Congress did not intend to permit a litigant challenging an administrative denial ... to utilize simultaneously both [the review provision] and the APA." Garcia v. Vilsack, 563 F.3d at 522-23 (alterations in original) (quoting El Rio Santa Cruz Neighborhood Health Ctr. v. U.S. Dep't of Health & Human Servs., 396 F.3d at 1270).
But Garcia is distinguishable from the present case in a number of significant ways. In Garcia, there was no substantive difference between the relief available in the special judicial proceeding and that available in an APA action, and plaintiffs were in fact attempting to pursue both avenues of relief at the same time. See Garcia v. Vilsack, 563 F.3d at 521, 523 (noting that plaintiffs brought claims under Equal Credit Opportunity Act and the
Furthermore, although the tax refund suit provision typically will preclude suits by parties who bring a tax challenge in federal court without first exhausting their administrative remedies, see Cohen v. United States, 650 F.3d at 733, this is not a typical case. As in Cohen, plaintiffs here bring a pre-enforcement challenge to a final agency rule, rather than individualized adjudications of tax liability. The dispute before the Court is purely legal and ripe for review. Any administrative challenge would be futile, as the Secretary of the Treasury can be expected to deny plaintiffs' complaint as contrary to the issued IRS regulations. Abstaining from a decision now would simply kick the can down the road until 2015, after the Secretary of the Treasury reaffirms the view he already has announced in promulgating the Rule. See Oct. 21, 2013 Tr. 18-20.
The Court therefore concludes that the tax refund suit is not an adequate alternative to the judicial review provisions of the APA in this case. The "doubtful and limited relief" possibly available sometime in the future in a tax refund suit is "not an adequate substitute" for APA review here and now. Bowen v. Massachusetts, 487 U.S. at 901, 108 S.Ct. 2722; see id. at 904-05, 108 S.Ct. 2722 (rejecting federal agency's assertion that an after-the-fact action in the Claims Court was an adequate alternative for prospective relief requested by state plaintiff in APA suit). To the extent that this is a close call, the Court relies on the Supreme Court's directive that the APA's review provisions should be given "a `hospitable' interpretation," as the APA's underlying purpose is to "remove obstacles to judicial review of agency action." Id. at 904, 108 S.Ct. 2722 (internal quotations omitted). The Court therefore concludes that plaintiffs' suit is not barred under the APA.
Defendants raise several challenges regarding the justiciability of the employer
Although the APA waives sovereign immunity for suits against the federal government, 5 U.S.C. § 702, it "preserves `other limitations on judicial review' and does not `confer[] authority to grant relief if any other statute ... expressly or impliedly forbids the relief which is sought.'" Cohen v. United States, 650 F.3d at 724 (alterations in original) (quoting 5 U.S.C. § 702). The Anti-Injunction Act (the "AIA") is one such limitation on judicial review.
The AIA provides that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed." 26 U.S.C. § 7421(a). The statute acts as a limitation on a court's subject matter jurisdiction, Gardner v. United States, 211 F.3d 1305, 1311 (D.C.Cir.2000), and generally applies regardless of whether the suit presents a constitutional, statutory, or regulatory challenge. See, e.g., Alexander v. "Americans United" Inc., 416 U.S. at 759-60, 94 S.Ct. 2053 (finding AIA barred constitutional challenge to denial of tax-exempt status); Enochs v. Williams Packing & Nav. Co., 370 U.S. 1, 3, 7-8, 82 S.Ct. 1125, 8 L.Ed.2d 292 (1962) (applying AIA to statutory challenge).
"The manifest purpose of § 7421(a) is to permit the United States to assess and collect taxes alleged to be due without judicial intervention, and to require that the legal right to the disputed sums be determined in a suit for refund" after the taxes have been paid. Cohen v. United States, 650 F.3d at 724 (quoting Enochs v. Williams Packing & Nav. Co., 370 U.S. at 7, 82 S.Ct. 1125). The AIA arose out of a concern by Congress "about the ... danger that a multitude of spurious suits, or even suits with possible merit, would so interrupt the free flow of revenues as to jeopardize the Nation's fiscal stability." Id. (quoting Alexander v. "Americans United" Inc., 416 U.S. at 769, 94 S.Ct. 2053 (Blackmun, J., dissenting)). The AIA "has `almost literal effect': It prohibits only those suits seeking to restrain the assessment or collection of taxes." Id. (quoting Bob Jones Univ. v. Simon, 416 U.S. at 737, 94 S.Ct. 2038). The AIA applies regardless of whether its application results in uncertainty or hardship for the taxpayer. Bob Jones Univ. v. Simon, 416 U.S. at 745, 94 S.Ct. 2038; Alexander v. "Americans United" Inc., 416 U.S. at 762, 94 S.Ct. 2053.
Although the employer plaintiffs are challenging the legality of a regulation governing tax credits, not a tax collection, they do so in order to restrain the IRS from assessing the payments described in 26 U.S.C. § 4980H, which are triggered by the award of tax credits to their employees. In fact, their theory of injury hinges on this relationship. See Pls.' SJ Opp. 38-41. The Court therefore must address the question of whether the Section 4980H assessment is a tax for purposes of the Anti-Injunction Act. See Alexander v. "Americans United" Inc., 416 U.S. at 760, 94 S.Ct. 2053 (adopting broad interpretation
In Nat'l Fed'n of Indep. Bus., the Supreme Court held that the label that Congress gives to an assessment collected by the IRS matters for purposes of the AIA. Nat'l Fed'n of Indep. Bus. v. Sebelius, 132 S.Ct. at 2583. Chief Justice Roberts, writing for a majority of the Court, explained: "The Anti-Injunction Act and the Affordable Care Act ... are creatures of Congress's own creation. How they relate to each other is up to Congress, and the best evidence of Congress's intent is the statutory text." Id. He then concluded that the penalty imposed on individuals who fail to obtain minimum coverage under 26 U.S.C. § 5000A — though a tax for constitutional purposes — was not a tax for purposes of the Anti-Injunction Act. Id. at 2583-84. Why not? Because Congress consistently used the term "penalty" rather than the term "tax" in describing the Section 5000H exaction. Id. By contrast, other payments imposed under the ACA were expressly described by Congress as "taxes," id. at 2583, and the statute's "consistent distinction between the terms `tax' and `assessable penalty'" reflected an intent to distinguish these two exactions for purposes of the AIA. Id. at 2584.
Unlike the Section 5000A "assessable penalty" examined by the Supreme Court in Nat'l Fed. of Indep. Business, the Section 4980H assessment is described at various places in the statutory text both as an "assessable payment" and as a "tax." In Section 4980H itself, the fee is called an "assessable payment" seven times and a "tax" twice. See 26 U.S.C. § 4980H(b)(1)(B) (referring to "assessable payment"); Section 4980H(c)(2)(D)(i)(I) (same); Section 4980H(d) (referring to "assessable payment" four times); Section 4980H(b)(2) (referring to the "aggregate amount of tax determined" that an employer must pay); Section 4980H(c)(7) (referring to the "denial of deduction for the tax imposed by this section"). This same assessment is described as a tax at least once elsewhere in the ACA. 42 U.S.C. § 18081(f)(2) ("The Secretary [of HHS] shall establish a separate appeals process for employers who are notified under subsection (e)(4)(C) that the employer may be liable for a tax imposed by section 4980H of Title 26[.]") (emphasis added).
The Fourth Circuit recently concluded that the occasional use of the word "tax" in Section 4980H was insufficient to implicate the Anti-Injunction Act. Liberty Univ., Inc. v. Lew, 733 F.3d at 86-89 (noting that the ACA "does not consistently characterize the exaction as a tax"). That court also found that it would be anomalous to allow individuals to bring pre-enforcement challenges to Section 5000A penalties (the provision considered by the Supreme Court in Nat'l Fed. of Indep. Business) while permitting employers to bring only post-enforcement challenges to Section 4980H assessments. Id. at 88-89. The Fourth Circuit therefore reasoned that the AIA did not prohibit a statutory challenge to Section 4980H. Id. at 89.
This Court is not persuaded by the Fourth Circuit's reasoning. That court reads the term "assessable payment" as nullifying the effect of the word "tax." In this Court's view, however, the natural conclusion to draw from Congress's interchangeable use of the terms "assessable payment" and "tax" in Section 4980H is simply that Congress saw no distinction between the two terms. See Cohen v. United States, 650 F.3d at 731 ("A baker who receives an order for `six' donuts and another for `half-a-dozen' does not assume the terms are requests for different quantities of donuts.... Different verbal formulations can, and sometimes do, mean
Furthermore, there is no other reason to presume that the AIA does not apply. The Section 4980H assessment acts like a tax and looks like a tax. The Court therefore embraces a modified version of the "now-infamous `duck test'": "WHEREAS it looks like a duck, and WHEREAS it walks like a duck, and WHEREAS it quacks like a duck," and WHEREAS it is called a duck by Congress on multiple occasions, "[THE COURT] THEREFORE HOLD[S] that it is a duck." Hussain v. Obama, 718 F.3d 964, 968 (D.C.Cir. 2013) (quoting Dole v. Williams Enterprises, Inc., 876 F.2d 186, 188 n.2 (D.C.Cir. 1989)).
Like most classic taxes, the exaction created by Section 4980H serves a revenueraising function: the fees collected by the employers are based on, and presumably are used to offset, tax credits dispensed to individuals purchasing their own insurance on the Exchanges. There therefore is no reason to treat a Section 4980H assessment as a regulatory penalty, rather than as a tax. Cf. Korte v. Sebelius, 735 F.3d 654, 669 (7th Cir.2013) (distinguishing between "severe and disproportionate" penalties which are used to "regulate[] private conduct and make[] noncompliance painful," and taxes that function to raise revenue) (internal quotations omitted); see also Direct Marketing Ass'n v. Brohl, 735 F.3d 904, 916 n.7 (10th Cir.2013) (noting distinction "between a `classic tax [that] sustains the essential flow of revenue to the government,' ... and a penalty that `rais[es] money to help defray an agency's regulatory expenses'") (internal quotations omitted).
Nor does it seem anomalous that Congress would have intended to allow preenforcement challenges by individuals while prohibiting pre-enforcement suits by employers. In fact, another provision in Section 4980H confirms that Congress assumed that employers would raise their challenges in post-collection suits. The statute provides that the Secretary of the Treasury "shall prescribe rules ... for the repayment of any assessable payment ... if such payment is based on the allowance or payment of an applicable premium tax credit or cost-sharing reduction with respect to an employee, such allowance or payment is subsequently disallowed, and
In sum, for purposes of the Anti-Injunction Act, the Court concludes that the assessable payment described in 26 U.S.C. § 4980H must be considered a tax. The AntiInjunction Act therefore bars the employer plaintiffs' claims, and those plaintiffs will be dismissed from this case.
Because the Court has jurisdiction over at least one of the individual plaintiffs' claims, however, it proceeds to a decision on the merits.
As noted above, plaintiffs' principal argument calls into question the IRS's interpretation of the ACA, as set forth in its regulations. When the action under review involves an agency's interpretation of a statute that the agency is charged with administering, the Court applies the familiar analytical framework set forth in Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).
"Under step one of Chevron, [the court] ask[s] whether Congress has directly spoken to the precise question at issue." Sec'y of Labor, Mine Safety & Health Admin. v. Nat'l Cement Co. of California, Inc., 494 F.3d 1066, 1073 (D.C.Cir.2007) (internal quotation and quotation marks omitted). In determining whether Congress has directly spoken to the precise question at issue, the Court uses the "traditional tools of statutory construction," including an examination of the statute's text, the structure of the statute, and (as appropriate) legislative history. Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. at 843 n.9, 104 S.Ct. 2778; see Bell Atl. Tel. Cos. v. FCC, 131 F.3d 1044, 1047 (D.C.Cir.1997). "If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Meredith v. Fed. Mine Safety & Health Review Comm'n, 177 F.3d 1042, 1053 (D.C.Cir. 1999) (internal quotation omitted).
If, however, the Court concludes that "the statute is silent or ambiguous with respect to the specific issue ..., [the Court] move[s] to the second step and defer[s] to the agency's interpretation as long as it is `based on a permissible construction of the statute.'" In Def. of Animals v. Salazar, 675 F.Supp.2d 89, 94 (D.D.C.2009) (quoting Sec'y of Labor, Mine Safety & Health Admin. v. Nat'l Cement Co. of California, Inc., 494 F.3d at 1074). At Chevron step two, the court must uphold the agency's interpretation "if it is reasonable and consistent with the statutory purpose and legislative history." Bell Atl. Tel. Cos. v. FCC, 131 F.3d at 1049. "Unlike [the court's] Chevron step one analysis, [its] review at this stage is `highly deferential.'" Vill. of Barrington, Ill. v. Surface Transp. Bd., 636 F.3d 650, 665 (D.C.Cir.2011) (quoting Nat'l Rifle Assn. of Amer. v. Reno, 216 F.3d 122, 137 (D.C.Cir.2000)).
Plaintiffs also object to the IRS Rule as being arbitrary and capricious. An agency rule is arbitrary and capricious "if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to
Congress expressly delegated authority to the Secretary of the Treasury to resolve any ambiguities in Section 36B. 26 U.S.C. § 36B(g) ("The Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this section."); see also 26 U.S.C. § 7805(a). As plaintiffs note, however, Treasury and HHS share joint responsibility for administering parts of the Act, including implementation of the tax credit scheme. HHS, for example, oversees the advance payments of premium tax credits. 42 U.S.C. § 18082(a) ("The Secretary [of HHS], in consultation with the Secretary of the Treasury, shall establish a program under which" advance determinations and payments of tax credits are made). The two agencies "work[ed] in close coordination ... to release guidance related to Exchanges," Health Insurance Premium Tax Credit, 76 Fed.Reg. 50,931, 50,932 (Aug. 17, 2011), and HHS has promulgated its own regulations providing that participants on both state and federal Exchanges are eligible for advance payments of the credits. See 45 C.F.R. § 155.20.
Plaintiffs argue that this shared authority precludes Chevron deference, as courts regularly decline to defer to agencies interpreting statutes that they do not have sole authority in administering. See, e.g., Collins v. Nat'l Transp. Safety Bd., 351 F.3d 1246, 1253 (D.C.Cir.2003) ("For statutes ... where the agencies have specialized enforcement responsibilities but their authority potentially overlaps — thus creating risks of inconsistency or uncertainty — de novo review may ... be necessary."); Benavides v. U.S. Bureau of Prisons, 995 F.2d 269 (D.C.Cir.1993) (no Chevron deference to agency interpretation of the Privacy Act, a statute of general applicability administered by multiple agencies). But where, as here, "the subject matter of the statute falls squarely within the agencies' areas of expertise, and the Regulations were issued as a result of a statutorily coordinated effort among the agencies, Chevron is the governing standard." Individual Reference Servs. Grp., Inc. v. FTC, 145 F.Supp.2d 6, 24 (D.D.C.2001), aff'd, Trans Union LLC v. FTC, 295 F.3d 42 (D.C.Cir.2002); see also Nat'l Ass'n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 665-66, 127 S.Ct. 2518, 168 L.Ed.2d 467 (2007).
In construing a statute's meaning, the Court "begin[s], as always, with the language of the statute." Duncan v. Walker, 533 U.S. 167, 172, 121 S.Ct. 2120, 150 L.Ed.2d 251 (2001). The statutory
26 U.S.C. § 36B(a) (emphasis added).
The term "applicable taxpayer" is defined as "a taxpayer whose household income for the taxable year equals or exceeds 100 percent but does not exceed 400 percent of an amount equal to the poverty line for a family of the size involved." 26 U.S.C. § 36B(c)(1)(A). This statutory provision does not distinguish between taxpayers residing in states with state-run Exchanges and those in states with federally-facilitated Exchanges.
Subsection (b) of Section 36B — which sets forth the formula for calculating the premium tax credit — contains the language that plaintiffs say precludes tax credits for taxpayers on federal Exchanges. This provision directs the Internal Revenue Service to calculate an individual's premium tax credit — or the "premium assistance credit amount" — by adding up the "premium assistance amounts" for all "coverage months" in a given year. 26 U.S.C. § 36B(b)(1). The "premium assistance amount" is based in part on the cost of the monthly premium for the health plan that the taxpayer purchased "through an Exchange established by the State under [42 U.S.C. § 18031]." 26 U.S.C. § 36B(b)(2). A "coverage month" likewise is defined as any month during which the taxpayer (or spouse or dependent) is enrolled in, and pays the premium for, a qualified health plan "that was enrolled in through an Exchange established by the State under [42 U.S.C. § 18031]." 26 U.S.C. § 36B(c)(2)(A)(i). Thus, the tax credit to a qualifying individual is tied to the cost of insurance purchased "through an Exchange established by the State under [42 U.S.C. § 18031]." The term "Exchange" is not defined in Section 36B, but the phrase "established by the State under [42 U.S.C. § 18031]" directs the Treasury Secretary and the IRS Commissioner to define "Exchange" with reference to other provisions of the ACA, located in Title 42 of the United States Code. 26 U.S.C. § 36B(b)(2); 26 U.S.C. § 36B(c)(2)(A)(i).
Plaintiffs contend that by using the phrase "established by the State under [42 U.S.C. § 18031]," as opposed to a phrase like "established under this Act," see 42 U.S.C. § 18032(d)(3)(D)(i)(II), Congress intended to refer exclusively to state-run Exchanges, as opposed to federally-facilitated Exchanges, and thus to limit the availability of the Section 36B tax credits to persons residing only in the states that have established their own Exchanges. Under plaintiffs' construction of the Act, a taxpayer in a state with a federal Exchange will never purchase insurance "enrolled in through an Exchange established by the State under [42 U.S.C. § 18031]." The premium assistance credit amount available to "applicable taxpayers" residing in states with federally-facilitated Exchanges therefore will always be zero.
On its face, the plain language of 26 U.S.C. § 36B(b)-(c), viewed in isolation, appears to support plaintiffs' interpretation. The federal government, after all, is not a "State," which is explicitly defined in the Act to mean "each of the 50 States and the District of Columbia." ACA § 1304(d), codified at 42 U.S.C. § 18024(d). The phrase "Exchange established by the State under [42 U.S.C. § 18031]" therefore, standing alone, could be read to refer only to state-run Exchanges.
In making the threshold determination under Chevron, however, "a reviewing
The cross-referenced 42 U.S.C. § 18031 provides that "[e]ach State shall, not later than January 1, 2014, establish an American Health Benefit Exchange (referred to in this title as an "Exchange")[.]" 42 U.S.C. § 18031(b)(1) (emphasis added). That section then states that "[a]n Exchange shall be a governmental agency or nonprofit entity that is established by a State." 42 U.S.C. § 18031(d)(1) (emphasis added). In both of these provisions, Congress describes an "Exchange" as necessarily being established by a State. The definitions section of the ACA, Section 1563(b), clarifies that this description is definitional: Section 1563(b) provides that "[t]he term `Exchange' means an American Health Benefit Exchange established under [42 U.S.C. § 18031]." ACA § 1563(b)(21), codified at 42 U.S.C. § 300gg-91 (d)(21).
Plaintiffs and defendants agree that 42 U.S.C. § 18031 does not mean what it literally says; states are not actually required to "establish" their own Exchanges. Pls.' SJ Opp. 14 ("All agree that states are free not to establish Exchanges.") (emphasis in original). This is because Section 1321 of the ACA provides that a state may "elect" to establish an Exchange and implement federal requirements for that Exchange. ACA § 1321, codified at 42 U.S.C. § 18041. If a state (i) is not an "electing State," (ii) fails to have "a required Exchange operational by January 1, 2014," or (iii) has not taken the actions necessary to establish an operational Exchange consistent with federal requirements, "the Secretary shall ... establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements." 42 U.S.C. § 18041(c) (emphasis added). In other words, if a state will not or cannot establish its own Exchange, the ACA directs the Secretary of HHS to step in and create "such Exchange" — that is, by definition under the statute, "an American Health Benefit Exchange established under [Section 18031]." 42 U.S.C. § 18041(c); 42 U.S.C. § 300gg-91(d)(21).
Looking only at the language of 26 U.S.C. § 36B(b)-(c), isolated from the cross-referenced text of 42 U.S.C. § 18031, 42 U.S.C. § 18041, and 42 U.S.C. § 300gg-91(d)(21), the plaintiffs' argument may seem the more intuitive one. Why would Congress have inserted the phrase "established by the State under [42 U.S.C. § 18031]" if it intended to refer to Exchanges created by a state or by HHS? But defendants provide a plausible and
Because each side provides a credible construction of the language of Section 36B(b)-(c) — though defendants' is the more credible when viewed in light of the cross-referenced provisions — the Court moves on to consider the other "traditional tools of statutory construction" under Chevron step one, including the structure of the statute and the context in which the language of Section 36B is set. Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. at 843 n.9, 104 S.Ct. 2778.
Courts have a "duty to construe statutes, not isolated provisions." Graham County Soil and Water Conservation Dist. v. United States ex rel. Wilson, 559 U.S. 280, 290, 130 S.Ct. 1396, 176 L.Ed.2d 225 (2010) (quoting Gustafson v. Alloyd Co., 513 U.S. 561, 568, 115 S.Ct. 1061, 131 L.Ed.2d 1 (1995)); Household Credit Servs., Inc. v. Pfennig, 541 U.S. at 239, 241, 124 S.Ct. 1741. Thus, even beyond Section 36B(b)-(c) and the other provisions of the ACA it specifically cross-references, the Court must "interpret the statute `as a symmetrical and coherent regulatory scheme,' and `fit, if possible, all parts into an harmonious whole.'" FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132-33, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000) (internal quotations omitted).
The defendants point to various provisions of the ACA that appear to reflect an intent by Congress to make tax credits available to taxpayers purchasing insurance from the federally-facilitated Exchanges; they also cite provisions that, if construed consistently with plaintiffs' proposed definition, would create numerous anomalies within the statute that Congress could not have intended. See 26 U.S.C. § 36B(f)(3) (requiring reporting by federally-run Exchanges of advance payments of tax credits); 42 U.S.C. § 18032(f)(1)(A)(ii) (restricting any Exchange-based purchase of health insurance to residents of "the State that established the Exchange"); 42 U.S.C. § 1396a(gg) (providing that a state must maintain certain standards in its Medicaid program until "an Exchange established by the State under [42 U.S.C. § 18031] is fully operational"); 42 U.S.C. § 1397ee(d)(3)(B) (requiring HHS to determine, for each state, whether health plans offered through "an Exchange established by the State under [42 U.S.C. § 18031]" provide benefits for children comparable to those offered in the state's CHIP plan).
The Court finds the defendants' arguments compelling and the plaintiffs' counter-arguments unpersuasive. The Court
Subsection (f) of Section 36B — titled "Reconciliation of credit and advance credit" and located in the same section as the disputed statutory phrase — provides that the premium tax credit that a taxpayer receives at the end of the year must be reduced by the amount of any advance payment of such credit. 26 U.S.C. § 36B(f)(1). In order for the IRS to track these advance payments, the statute mandates that "[e]ach Exchange (or any person carrying out 1 or more responsibilities of an Exchange under [42 U.S.C. § 18031] or [42 U.S.C. § 18041])" provide certain information to the Secretary of the Treasury and to the taxpayer "with respect to any health plan provided through the Exchange." 26 U.S.C. § 3613(f)(3) (emphasis added). The provision requires the reporting of information on the level of coverage provided to each taxpayer, the price of the insurance premium, and the amount of the advance payment.
By invoking both Section 18031 and Section 18041, this advance payment provision is expressly directed at every Exchange, regardless of whether the Exchange is state- or federally-run. Section 3613(f) would serve no purpose with respect to the federally-facilitated Exchanges, and the language referencing 42 U.S.C. § 18041 would be superfluous, if federal Exchanges were not authorized to deliver tax credits. Section 3613(f) thus indicates that Congress assumed that premium tax credits would be available on any Exchange, regardless of whether it is operated by a state under 42 U.S.C. § 18031 or by HHS under 42 U.S.C. § 18041.
Section 1312 of the ACA, codified at 42 U.S.C. § 18032, sets forth provisions regarding which individuals may purchase insurance from the Exchanges. This section provides that only "qualified individuals" may purchase health plans in the individual markets offered through the Exchanges, and requires that a "qualified individual" be a person who "resides in the State that established the Exchange." 42 U.S.C. § 18032(f)(1)(A)(ii). There is no separate provision defining "qualified individual" for purposes of the federally-facilitated Exchanges.
If this provision were read literally, no "qualified individuals" would exist in the thirty-four states with federally-facilitated Exchanges, as none of these states is a "State that established [an] Exchange." The federal Exchanges would have no customers, and no purpose. Such a construction must be avoided, if at all possible. See Fund for Animals, Inc. v. Kempthorne, 472 F.3d 872, 877 (D.C.Cir.2006) ("[C]ourts presume that Congress has used its scarce legislative time to enact statutes that have some legal consequence."). And this absurd construction can be avoided, say defendants, by viewing 42 U.S.C. § 18041 — the provision which grants states flexibility in the operation of Exchanges and permits the Secretary to establish and operate an Exchange when a state declines to do so — as authorizing the federal government to "stand[] in the shoes of the state" for purposes of Section 18032's residency requirement. See Defs.' Reply 13.
In adopting the ACA, Congress believed that the Act would address the lack of access by many Americans to affordable health care, ACA § 1501(a)(2)(E)-(G), codified at 42 U.S.C. § 18091(2)(E)-(G), and would lead to "near-universal coverage." ACA § 1501(a)(2)(D), codified at 42 U.S.C. § 18091(2)(D). Indeed, Title I of the ACA is titled "Quality, Affordable Health Care for All Americans" (emphasis added). Plaintiffs' proposed construction in this case — that tax credits are available only for those purchasing insurance from state-run Exchanges — runs counter to this central purpose of the ACA: to provide affordable health care to virtually all Americans. Such an interpretation would violate the basic rule of statutory construction that a court must interpret a statute in light of its history and purpose. See Zuni Pub. Sch. Dist. No. 89 v. Dep't of Educ., 550 U.S. 81, 90-93, 127 S.Ct. 1534, 167 L.Ed.2d 449 (2007); Ragsdale v. Wolverine World Wide, Inc., 535 U.S. 81, 88, 122 S.Ct. 1155, 152 L.Ed.2d 167 (2002) (rejecting Department of Labor rule as "contrary to the [statute's] remedial design").
Plaintiffs try to explain away the inconsistency between their proposed construction and the statute's underlying purpose by proposing that Congress had another, equally pressing goal when it passed the ACA: convincing each state to set up its own health insurance Exchange. See Pls.' SJ Opp. 23-24; Dec. 3, 2013 Tr. 8. According to plaintiffs, Congress desperately wanted to keep the federal government out of the business of running any Exchange, and it therefore sought to persuade the states to establish and operate the Exchanges. Pls.' SJ Opp. 23-24. As an inducement, say plaintiffs, Congress made premium tax credits available only to those states that set up their own Exchanges. Id.; see also Dec. 3, 2013 Tr. 8 (Congress needed to provide states with "a big incentive" to undertake "a thankless, very controversial task"); Dec. 3, 2013 Tr. 12 ("Everyone assumed that the states would take
Plaintiffs' theory is tenable only if one accepts that in enacting the ACA, Congress intended to compel states to run their own Exchanges — or at least to provide such compelling incentives that they would not decline to do so. The problem that plaintiffs confront in pressing this argument is that there is simply no evidence in the statute itself or in the legislative history of any intent by Congress to ensure that states established their own Exchanges. And when counsel for plaintiffs was asked about this at oral argument, he could point to none. See Dec. 3, 2013 Tr. 8-18. Indeed, if anything, the legislative history cuts in the other direction and suggests that Congress intended to provide states with flexibility as to whether or not to establish and operate Exchanges. See infra at 23-25.
Nor does plaintiffs' theory make intuitive sense. A state-run Exchange is not an end in and of itself, but rather a mechanism intended to facilitate the purchase of affordable health insurance. And there is evidence throughout the statute of Congress's desire to ensure broad access to affordable health coverage. See, e.g., 42 U.S.C. § 18091(2)(D)-(G). It makes little sense to assume that Congress sacrificed nationwide availability of the tax credit — which plaintiff David Klemencic previously described as critical to the operation of the Exchanges, Brief for Private Petitioners on Severability, Nat'l Fed'n of Indep. Bus. v. Sebelius, ___ U.S. ___, 132 S.Ct. 2566, 183 L.Ed.2d 450 (2012) (Nos. 11-393 & 11-400), 2012 WL 72440, (Defs.' SJ Mot., Ex. 14) — in an attempt to promote state-run Exchanges.
In sum, while there is more than one plausible reading of the challenged phrase in Section 36B when viewed in isolation, the cross-referenced sections, the surrounding provisions, and the ACA's structure and purpose all evince Congress's intent to make premium tax credits available on both state-run and federally-facilitated Exchanges. Thus, the intent of Congress is clear at Chevron step one. See Nat'l Cable & Telecomms. Ass'n v. FCC, 567 F.3d 659, 663, 665 (D.C.Cir.2009) (employing all "traditional tools of statutory interpretation," including "text, structure, purpose, and legislative history," to ascertain Congress's intent at Chevron step one); Catawba County, North Carolina v. Envtl. Prot. Agency, 571 F.3d 20, 35 (D.C.Cir. 2009).
If there were any remaining uncertainty as to the ACA's meaning — and there is not — the scant relevant legislative history in this case confirms Congress's intent on this point. See, e.g., Nat'l Cable & Telecomms. Ass'n v. FCC, 567 F.3d at 665 (considering legislative history at Chevron step one); Sierra Club v. Envtl. Prot. Agency, 551 F.3d 1019, 1027 (D.C.Cir.2008) (same).
Early proposals for comprehensive health insurance reform contemplated that the federal government would establish and operate the Exchanges, and an earlier version of the House Bill so provided. See Reconciliation Act of 2010, H.R. 4872 §§ 141(a), 201(a) (2010) (version reported in the House on March 17, 2010) (establishing a national exchange within a newly created Health Choices Administration located in the Executive Branch); see also H. Rep. No. 111-443, at 18, 26 (2013). Ultimately, however, these proposals proved politically untenable and doomed to failure in the Senate, so the Senate passed a bill that provided "flexibility" to each state as to whether it would operate the Exchange. See 42 U.S.C. § 18041 (titled "State Flexibility in operation and enforcement of Exchanges ..."). As the Chairman of the Senate Finance Committee — the committee that considered and reported the bill — described it, the ACA "fundamentally gives States the choice to participate in the exchanges themselves or, if they do not choose to do so, to allow the Federal Government to set up the exchanges." 155 Cong. Rec. S13,832 (Dec. 23, 2009) (Sen.Baucus). The Senate Finance Committee expressly contemplated that the federal government could "establish state exchanges." See S. Rep. No. 111-89, at 19 (Oct. 19, 2009) ("If these [state] interim exchanges are not operational within a reasonable period after enactment, the Secretary [of HHS] would be required to contract with a nongovernmental entity to establish state exchanges during this interim period.") (emphasis added). This history reveals an intent to grant states the option of establishing their own Exchanges, rather than an intent to coerce or entice states into participating.
Furthermore, there is no evidence that either the House or the Senate considered making tax credits dependent upon whether a state participated in the Exchanges. To the contrary, Congress assumed that tax credits would be available nationwide. See, e.g., Congressional Budget Office, An Analysis of Health Insurance Premiums Under the Patient Protection and Affordable Care Act, Defs.' SJ Mot., Ex. 5, at 2, 4-7 (Nov. 30, 2009) (calculating anticipated subsidies across all states); Letter from Douglas W. Elmendorf, Director, CBO, to Rep. Darrell Issa, Chairman, House Committee on Oversight and Government Reform, Defs.' SJ Mot., Ex. 17, at 1 (Dec. 6, 2012) ("To the best of our recollection, the possibility that those subsidies would only be available in states that created their own exchanges did not arise during the discussions CBO staff had with a wide range of Congressional staff when the legislation was being considered."). Plaintiffs hang much of their argument on the suggestion of one contemporaneous commentator that Congress
In sum, the Court finds that the plain text of the statute, the statutory structure, and the statutory purpose make clear that Congress intended to make premium tax credits available on both state-run and federally-facilitated Exchanges. What little relevant legislative history exists further supports this conclusion and certainly — despite plaintiffs' best efforts to suggest otherwise — it does not undermine it. The Court therefore concludes that "Congress has directly spoken to the precise question" of whether an "Exchange" under 26 U.S.C. § 36B includes federally-facilitated Exchanges. Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. at 842, 104 S.Ct. 2778. And that must be "the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Id. at 842-83, 104 S.Ct. 2778. The IRS has done exactly that by promulgating regulations authorizing the provision of tax credits to individuals who purchase health insurance on federally-facilitated Exchanges as well as to those who purchase insurance on state-run Exchanges.
For the reasons discussed above, the Court finds that the IRS Rule is consistent with the text, structure, and purpose of the Affordable Care Act. Section 36B must be read as authorizing the IRS to deliver tax credits to individuals purchasing health insurance on federally-facilitated Exchanges. The Court therefore denies plaintiffs' motion for summary judgment and grants defendants' motion for summary judgment. An Order consistent with this Opinion will issue this same day.
For the reasons set forth in the Opinion issued this same day, it is hereby
ORDERED that the employer plaintiffs are dismissed from this action pursuant to the Anti-Injunction Act, 26 U.S.C. § 7421(a); it is
FURTHER ORDERED that the plaintiffs' motion for summary judgment [Dkt. No. 17] is DENIED; it is
FURTHER ORDERED that the defendants' motion for summary judgment [Dkt. No. 49] is GRANTED. Judgment is entered for the defendants; and it is
FURTHER ORDERED that the Clerk of the Court shall remove this case from the docket of this Court. This is a final
SO ORDERED.
