No.

__

In the Supreme Court of the United States

STATE OF WEST VIRGINIA
EX REL. PATRICK MORRISEY,
Petitioner,
v.
UNITED STATES DEPARTMENT
OF HEALTH AND HUMAN RESOURCES,
Respondent.
ON PETITION FOR WRIT OF CERTIORARI
TO THE U.S. COURT OF APPEALS
FOR THE D.C. CIRCUIT
PETITION FOR WRIT OF CERTIORARI
OFFICE OF THE
ATTORNEY GENERAL
State Capitol
Building 1, Room E-26
Charleston, WV 25305
[email protected]
(304) 558-2021

PATRICK MORRISEY
Attorney General
ELBERT LIN
Solicitor General
Counsel of Record
JULIE MARIE BLAKE
Assistant Attorney
General

Counsel for Petitioner

i
QUESTIONS PRESENTED FOR REVIEW
Under Article III of the U.S. Constitution, a
plaintiff has standing to invoke federal jurisdiction
so long as the plaintiff has suffered an injury in fact
that is fairly traceable to the challenged conduct and
that is redressable by a favorable judgment. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560 (1991). The
plaintiffs injury must be concrete, as opposed to
abstract, and must also be particular, as opposed to
generalized.
The questions presented in this case are:
(1) Whether Spokeo, Inc. v. Robins, 136 S. Ct.
1540 (2016), precludes the conclusion that an injury
is insufficiently concrete simply because it is
inherently immeasurable or not particular;
(2) Whether a State claiming a breach of state
sovereignty has alleged a sufficient injury-in-fact
under cases like Alfred L. Snapp & Son, Inc. v.
Puerto Rico, ex rel., Barez, 458 U.S. 592 (1982), or is
such an injury analogous to a generally available
grievance about government; and
(3) Whether a non-federal entity (public or
private) has standing to challenge the delegation of
authority to it to set or enforce federal law, such as
the delegation found to be unconstitutional
delegation in its most obnoxious form in Carter v.
Carter Coal Co., 298 U.S 238 (1936).

ii
TABLE OF CONTENTS
QUESTIONS PRESENTED FOR REVIEW .............. i
TABLE OF CONTENTS ............................................ ii
TABLE OF AUTHORITIES........................................ v
OPINIONS BELOW ....................................................1
JURISDICTION ..........................................................1
CONSTITUTIONAL
AND
STATUTORY
PROVISIONS INVOLVED ...................................2
GLOSSARY .................................................................3
PETITION FOR CERTIORARI ..................................4
STATEMENT ..............................................................6
I.

Legal and Statutory Background .........................6

A. Article III Standing ........................................6
B. The Administrative Fix to the Affordable
Care Act ..........................................................8

II. The Proceedings Below ....................................... 10

REASONS FOR GRANTING THE PETITION ....... 12
I.

The D.C. Circuits decision conflicts with or

undermines
several
of
this
Courts
precedents. .......................................................... 12
A. The decision below conflicts with this
Courts decision in Spokeo. ........................... 12
B. The decision below conflicts with this
Courts numerous decisions holding that
an intrusion on state sovereignty
constitutes an Article III injury-in-fact. ...... 14
C. The decision below undermines this
Courts decision in Carter Coal. ................... 16

iii
II. The D.C. Circuits decision removes an
important
check
on
the
Federal
Governments role in our system of dual
sovereignty. ......................................................... 18
CONCLUSION .......................................................... 22

APPENDIX
Court of appeals opinion (July 1, 2016).......App. 1a
District court opinion (Oct. 30, 2015).......App. 9a
District court judgment (Oct. 30, 2015)..App. 47a
U.S. Const. art. II, 3.....App. 49a
U.S. Const. art. III, 2, cl. 1.....App. 49a
42 U.S.C. 300gg ....App. 51a
42 U.S.C. 300gg-1.....App. 53a
42 U.S.C. 300gg-2 ....App. 57a
42 U.S.C. 300gg-3 ....App. 62a
42 U.S.C. 300gg-4 ....App. 81a
42 U.S.C. 300gg-5.....App. 97a
42 U.S.C. 300gg-6 ....App. 98a
42 U.S.C. 300gg-8 App. 99a
42 U.S.C. 300gg-22.App. 105a
Complaint (July 29, 2014)...App. 115a
Presidential Statement of Intent to Veto the
Keep Your Health Plan Act of 2013
(Nov. 14, 2013).App. 157a
Presidential Press Conference Announcing the
Administrative Fix (Nov. 14, 2013).....App. 159a
HHS Letter to State Insurance Commissioners
Announcing the Administrative Fix
(Nov. 14, 2013).....App. 183a
HHSs Announcement of the First Extension of the
Administrative Fix (Mar. 5, 2014)...App. 188a

iv
West Virginia Insurance Commissioners
Initial Response to the Administrative Fix
(Nov. 21, 2013).App. 200a
West Virginia Insurance Commissioners
Response to HHSs Extension of the Administrative
Fix (Apr. 19, 2014) .App. 201a
HHSs Notification to the D.C. Circuit of a Second
Extension of the Administrative Fix
(Mar. 2, 2016)...App. 205a
HHSs Announcement of the Second Extension of the
Administrative Fix (Feb. 29, 2016).App. 207a

TABLE OF AUTHORITIES
CONSTITUTIONAL AND STATUTORY AUTHORITIES
U.S. Const. art. II, 3 ....................................... passim
U.S. Const. amend. x ......................................... passim
5 U.S.C. 553 ............................................................ 10
28 U.S.C. 1254 ..........................................................1
42 U.S.C. 300gg .................................................... 2, 8
42 U.S.C. 300gg-1 .....................................................8
42 U.S.C. 300gg-2 .....................................................8
42 U.S.C. 300gg-3 .....................................................8
42 U.S.C. 300gg-4 .....................................................8
42 U.S.C. 300gg-5 .....................................................8
42 U.S.C. 300gg-6 .....................................................8
42 U.S.C. 300gg-8 .....................................................8
42 U.S.C. 300gg-22 ......................................... 2, 8, 10
CASES
Alfred L. Snapp & Son, Inc. v. Puerto Rico, ex
rel., Barez,
458 U.S. 592 (1982) ................................. 45, 7, 14
Allen v. Wright,
468 U.S. 737 (1984) ............................................. 18
Arizona State Legislature v. Ariz. Independent
Redistricting Commission,
135 S. Ct. 2652 (2015) ............................... 8, 1314
Carter v. Carter Coal Co.,
298 U.S 238 (1936) .......................... 45, 1012, 17

vi
Federal Maritime Comn v. South Carolina State
Ports Authority,
535 U.S. 743 (2002) ....................................... 1516
Hodel v. Virginia Surface Mining & Reclamation
Assn,
452 U.S. 264 (1981) ....................................... 1819
Kingdomware Techs., Inc. v. United States,
136 S. Ct. 1969 (2016) ......................................... 21
Knox v. Serv. Employees Intl Union, Local,
1000, 132 S. Ct. 2277 .......................................... 21
Lujan v. Defenders of Wildlife,
504 U.S. 555 (1991) ............................... 67, 1618
Maine v. Taylor,
477 U.S. 131 (1986) ......................................... 7, 15
Massachusetts v. EPA,
549 U.S. 497 (2007) ................................... 7, 16, 21
Milner v. Dept. of Navy,
562 U.S. 562 (2011) ............................................. 20
New York v. United States,
505 U.S. 144 (1992) ................................... 9, 1819
Perez v. Mortgage Bankers Assn,
135 S. Ct. 1199 (2015) ......................................... 20
United States v. SCRAP,
412 U.S. 669 (1973) ....................................... 1617
South Carolina v. Katzenbach,
383 U.S. 301 (1966) ............................................. 15
Spokeo, Inc. v. Robins,
136 S. Ct. 1540 (2016) ........................... 47, 1315
Warth v. Seldin,
422 U.S. 490 (1975) ..................................... 78, 13

vii

OTHER AUTHORITIES
Enforcement Discretion and Executive Duty,
67 Vand. L. Rev. 671 (2014) ............................... 10
The Legality of Delaying Key Elements of the
ACA, 2014 New. England J. Med. 370 (May
22, 2014) .............................................................. 10
The Obamacare Fix Is Illegal, Politico (Nov. 22,
2013) .................................................................... 10
Philip Hamburger, Is Administrative Law
Unlawful? (2014) ................................................. 10
Securing Sovereign State Standing,
97 Va. L. Rev. 2051 (2011) .................................. 15

OPINIONS BELOW
In the decision under review, the U.S. Court of
Appeals for the D.C. Circuit affirmed the judgment of
the U.S. District Court for the District of Columbia.
This opinion is reported at 827 F.3d 81 and is
reprinted in the Appendix at App. 1a.
The decision of the U.S. District Court for the
District of Columbia granting the motion by the U.S.
Department of Health and Human Services to
dismiss this action for lack of Article III standing is
reported at 145 F. Supp. 3d 94 and is reprinted in
the Appendix at App. 9a.
JURISDICTION
This Court has jurisdiction under 28 U.S.C.
1254 over the judgment of the U.S. Court of Appeals
affirming the district courts order dismissing this
case for lack of Article III jurisdiction. The judgment
of the U.S Court of Appeals for the D.C. Circuit was
entered on July 1, 2016. On September 19, 2016, the
Chief Justice granted Petitioners application to
extend the deadline to file this Petition to November
28, 2016. No. 16A279. This Petition is timely filed
within that deadline.

2
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
The following constitutional and statutory
provisions are reproduced in the appendix: U.S.
Const. art. II, 3 (the Take Care Clause); U.S. Const.
art. III, 2, cl. 1 (the Judicial Power); 42 U.S.C.
300gg300gg-6, 300gg-8 (the Affordable Care Acts
eight market requirements); and 42 U.S.C. 300gg22 (the Affordable Care Acts cooperative-federalism
enforcement regime).

3
GLOSSARY
App.

Petitioners Appendix

ACA

Patient Protection and Affordable

Care Act, as amended by the
Health Care and Education
Reconciliation Act of 2010

APA

Administrative Procedure Act

HHS

United States Department

Health and Human Services

of

4
PETITION FOR CERTIORARI
The D.C. Circuits decision finding that West
Virginia lacked standing conflicts with or
undermines several of this Courts precedents,
including Spokeo, Inc. v. Robins, 136 S. Ct. 1540
(2016), Alfred L. Snapp & Son, Inc. v. Puerto Rico, ex
rel., Barez, 458 U.S. 592 (1982), and Carter v. Carter
Coal Co., 298 U.S 238 (1936). And, if permitted to
stand, the decision will remove an important check
on the Federal Governments role in our system of
dual sovereignty.
In the decision below, the D.C. Circuit affirmed
that West Virginia has not suffered an injury-in-fact
even though the court agreed that the Federal
Government has left the States holding the bag.
App. 2a5a. The statutory scheme at issue employs a
cooperative-federalism enforcement regime, in
which the States are given the first opportunity to
enforce certain federal requirements, but if they
refuse to do so, the Federal Government is required
to act as a backstop. Through the administrative
action being challenged, the Federal Government
abandoned its backstop role, thereby leaving the
States with the full and final decision over whether
federal law would be enforced or not enforced within
their respective borders. As a result, the D.C. Circuit
acknowledged, West Virginia now confronts
different political terrain than it did before [the
Federal Government] announced its new nonenforcement policy. App. 6a.
Nevertheless, the D.C. Circuit concluded that
this new burden on the State is somehow not a
cognizable injury-in-fact.

5
First, the appeals court concluded that West
Virginias injury was not sufficiently concrete
because it was both inherently immeasurable and
not particular. But just last term, this Court
reaffirmed in Spokeo, Inc. v. Robins that concrete
injuries need not be measurable, and that
concreteness and particularity are different concepts.
Second, the D.C. Circuit concluded that even if
the new burden on West Virginia was an intrusion
on the States sovereignty, the harm was akin to a
generally available grievance and therefore
insufficiently personal. Id. But that conclusion
contradicts this Courts many precedents, such as
Alfred L. Snapp & Son, Inc. v. Puerto Rico, ex rel.,
Barez, which recognize that no injury to a state could
be more personal than a breach of its distinct
sovereign status.
Third, the D.C. Circuit rejected West Virginias
argument that it had standing as the recipient of an
unconditional delegation of federal authority to ask a
court to rid it of that unwanted responsibility. The
D.C. Circuit concluded that no entity in that
situation would have standing, but that conclusion
cannot be squared with Carter v. Carter Coal Co., in
which this Court struck down such a delegation as
unconstitutional delegation in its most obnoxious
form.
This Courts intervention is needed to correct the
D.C. Circuits failure to heed this Courts precedents,
but also because the lower courts decision will have
significant consequences for the federal-state
balance. This Court has expressly endorsed
cooperative-federalism regimes as a careful and

6
constitutionally permissible balance between the
powers of the Federal Government and the States.
But the D.C. Circuits decision encourages the
Federal Government to legislate a cooperativefederalism regime and then abandon the backstop
role that is critical to protecting the States separate
sovereignty under the Tenth Amendment. That is a
dangerous precedent in a court that plays an
outsized role in the nations administrative law and
cooperative-federalism cases.
The petition for certiorari should be granted and
the judgment of the D.C. Circuit vacated.
STATEMENT
I.

Legal and Statutory Background

A. Article III Standing
Under Article III of the U.S. Constitution, the
federal judicial power is limited to cases and
controversies in which a plaintiff has suffered an
injury in fact that is fairly traceable to the
challenged conduct and that would be redressable
by a judgment in the plaintiffs favor. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560 (1991).
An injury in fact is an invasion of a legally
protected
interest
that
is
concrete
and
particularized. Ibid. For an injury to be
particularized, it must affect the plaintiff in a
personal and individual way. Spokeo, Inc. v. Robins,
136 S. Ct. 1540, 1548 (2016) (quoting Lujan, 504 U.S.
at 560 n.1). A plaintiff may not allege a generally
available grievance about governmentclaiming
only harm to his and every citizens interest in

7
proper application of the Constitution and laws, and
seeking relief that no more directly and tangibly
benefits him than it does the public at large. Lujan,
504 U.S. at 57374 (emphasis added). But, standing
is not to be denied simply because many people
suffer the same injury. United States v. SCRAP, 412
U.S. 669, 687 (1973).
Concreteness is a separate inquiry, and requires
an injury to be real[] and not abstract. Spokeo,
136 S. Ct. at 1548. That does not require, however,
that an injury be tangible. Id. at 1549. An injury
can be concrete even if the harm may be difficult to
prove or measure. Ibid.
This Court has frequently recognized that
intrusion on a states sovereignty is an injury-in-fact
for purposes of standing. In Alfred L. Snapp & Son,
Inc. v. Puerto Rico, ex rel., Barez, 458 U.S. 592
(1982), this Court easily identified two sovereign
interests that would justify standing, including the
exercise of sovereign power over individuals and
entities within the relevant jurisdiction. Id. at 601.
And in Maine v. Taylor, 477 U.S. 131 (1986), this
Court found that the State of Maine had standing
because, as a separate sovereign, the State clearly
has a legitimate interest in the continued
enforceability of its own statutes. Id. at 137. In
general, States are not normal litigants for the
purposes
of
invoking
federal
jurisdiction.
Massachusetts v. EPA, 549 U.S. 497, 51820 (2007).
Finally, this Court has instructed that when
evaluating a motion to dismiss for lack of Article III
standing, courts must accept as true all material
allegations of the complaint, Warth v. Seldin, 422

8
U.S. 490, 501 (1975), including the underlying
allegations of unlawful conduct, id. at 502. This
ensures that a court not confus[e] any perceived
weakness on the merits with absence of Article III
standing. Arizona State Legislature v. Ariz.
Independent Redistricting Commission, 135 S. Ct.
2652, 2663 (2015) (citation omitted). Standing in no
way depends on the merits of the plaintiffs
contention that particular conduct is illegal. Warth,
422 U.S. at 500.
B. The Administrative Fix to the Affordable
Care Act1
The Patient Protection and Affordable Care Act
(Affordable Care Act or ACA) creates eight federal
market requirements for individual health insurance
plans, 42 U.S.C. 300gg300gg-6, 300gg-8,2 that
were to be enforced under a cooperative-federalism
regime beginning January 1, 2014, 42 U.S.C.
300gg-22(a)(2); App. 12a. As under all cooperativefederalism regimes, States have the initial option to
enforce these requirements voluntarily against noncompliant plans. 42 U.S.C. 300gg-22(a)(2). But if a
State chooses not to do so, the U.S. Department of
Health and Human Services (HHS) shall enforce
them itself. 42 U.S.C. 300gg-22(a)(2). This type of
arrangementunder which the federal government
1

The facts in this statement come from West Virginias

complaint, App. 115a, which must be taken as true in reviewing
the Governments motion to dismiss for lack of Article III
standing.
2

The market requirements include mandates such as a

prohibition on insurers discriminating based on preexisting
conditions.

9
retains ultimately responsibility for the enforcement
of federal lawis replicated in numerous federal
statutory schemes and has been endorsed by this
Court as a means for Congress to influenc[e] a
States policy choices without violating the Tenth
Amendment. New York v. United States, 505 U.S.
144, 16667 (1992).
In the fall of 2013, insurers canceled millions of
health insurance plans in anticipation of the January
2014 effective date, prompting the President to
administratively fix the Affordable Care Act by
withholding federal enforcement. App. 121a22a,
126a29a, 159a, 162a. Unless the state insurance
commissioners choose to enforce the market
requirements, the Federal Government would permit
insurers to extend current plans that would
otherwise be canceled. App. 128a, 162a. HHS
formalized this Administrative Fix in a letter to the
States, App. 129a31a, 133a, 183a87a, calling it an
exercise of agency enforcement discretion, App.
129a, 132a, 144a45a. HHS later extended the Fix
through December 31, 2017. App. 131a, 188a, 205a,
207a.
The Federal Government thus left the States
solely responsible for deciding whether or not certain
mandates under federal law are to be enforced
within State borders. App. 136a138a. This is not a
question of States choosing to regulate (or not) under
their own state laws. App. 138a. Instead, federal
officials have sought to insulate themselves from
what federal law requires by making the States fully
responsible for determining the effect to give that
federal law.

10
As law professors from across the political
spectrum have recognized, there is no plausible legal
defense for the Administrative Fix.3 App. 147a26a.
First, the Fix is contrary to the Affordable Care Act,
which mandates that HHS shall enforce the federal
market requirements if a State has not done so. 42
U.S.C. 300gg-22(a)(2) (emphasis added); App.
147a49a. Second, the Administrative Fix was not
issued in compliance with notice-and-comment
requirements of the Administrative Procedure Act
(APA). 5 U.S.C. 553; App. 149a50a. Third, the
Administrative Fix is an unlawful delegation of
federal authority to a non-federal entity. See Carter
v. Carter Coal Co., 298 U.S 238 (1936); App. 150a
53a. Fourth, the Administrative Fix makes the
States politically accountable for federal law in
violation of the Tenth Amendment. U.S. Const.
amend. x; App. 153a55a.
II.

The Proceedings Below

The State of West Virginia filed a complaint
against HHS seeking declaratory and injunctive
relief in the U.S. District Court of the District of
Columbia, App. 115a57a, but in a lengthy opinion,

E.g., Nicholas Bagley, The Legality of Delaying Key Elements

of the ACA, 2014 New. England J. Med. 370 (May 22, 2014), at
http://www.nejm.org/doi/full/10.1056/NEJMp1402641; Eugene
Kontorovich, The Obamacare Fix Is Illegal, Politico (Nov. 22,
2013), at http://www.politico.com/magazine/story/2013/11/theobamacare-fix-is-illegal-100254.html#. U-Op-GOK1nY; Zachary
S. Price, Enforcement Discretion and Executive Duty, 67 Vand.
L. Rev. 671, 671, 750 (2014); cf. Philip Hamburger, Is
Administrative Law Unlawful? 6582, 12528 (2014).

11
the court determined that the State lacked Article III
standing, App. 9a.
The D.C. Circuit affirmed the district courts
judgment, concluding that West Virginia has not
suffered an injury-in-fact even though the court
agreed that the Federal Government has left the
States holding the bag. App. 2a5a. The Affordable
Care Act, the D.C. Circuit acknowledged, employs a
dual federal-state enforcement mechanism under
which the federal government is a backup enforcer.
App. 2a. Now, the Federal Government has
abandon[ed] that post and left the responsibility to
enforce or not to enforce the[] [market requirement]
provisions to the States. App. 2a3a. The States
have to decide whether to enforce or not to enforce
the very conditions that the federal government
determined to abandon. App. 3a. The D.C. Circuit
had no[] doubt that West Virginia now confronts
different political terrain than it did before HHS
announced its new non-enforcement policy. App. 6a.
Still, the D.C. Circuit held for three reasons that
this new burden on the State does not constitute an
Article III injury-in-fact. App. 5a8a. First, it held
that the [i]ncreased political accountability in
having the responsibility to determine whether to
enforce [federal law] or not is not a concrete injuryin-fact because it is an inherently immeasurable
harm. Id.
Second, the appeals court concluded that even
assuming the Fix was a breach of State sovereignty
in violation of the Tenth Amendment, the harm to
the State is not a concrete injury-in-fact. App. 7a.
The court further explained that the injury is not

12
particular. Id. Rather, West Virginias defense of its
sovereignty is analogous to a generally available
grievance. Id.
Third, the D.C. Circuit rejected West Virginias
argument that any party . . . has standing to
challenge a delegation from the government to carry
out a governmental responsibility. App. 8a. Indeed,
the court went so far as to hold that no entity (public
or private) to whom the federal government has
unlawfully delegated authority to set or enforce
federal law has standing to challenge that
delegation as unconstitutional. App. 8a. It
explained: Even if Congress gave the D.C. Circuit
authority, so long as we chose to use it, to set
electrical rates in the country as we pleased, we
certainly would not have standing to challenge that
delegation as unconstitutional. Ibid.
REASONS FOR GRANTING THE PETITION
I.

The D.C. Circuits decision conflicts with or

undermines
several
of
this
Courts
precedents.
A. The decision below conflicts with this
Courts decision in Spokeo.

The D.C. Circuit held in two ways that West

Virginias asserted injury was not sufficiently
concrete. The court concluded that the injury is not
concrete because it is inherently immeasurable.
App. 6a. And it also determined that West Virginia
lacks a concrete injury-in-fact because its injury is
not particular. App. 6a7a.

13
But neither of these conclusions can be squared
with this Courts recent Spokeo decision, which the
D.C. Circuit failed even to cite, despite being alerted
to the decision by the State of West Virginia in a
28(j) letter. 136 S. Ct. 1540 (2016). First, this Court
held unequivocally in Spokeo that although tangible
injuries are perhaps easier to recognize, it has long
been apparent that intangible injuries can
nevertheless be concrete. Spokeo, 136 S. Ct. at 1549.
Thus, an injury-in-fact may exist solely by virtue of .
. . the invasion of [legal rights]. Warth v. Seldin, 422
U.S. 490, 500 (1975). And a state legislature may sue
over an alleged institutional injury to its
constitutionally guarded role. Arizona State
Legislature v. Ariz. Independent Redistricting
Commission, 135 S. Ct. 2652, 266364 (2015). This
Court could not have been clearer: An injury can be
concrete even if the harm may be difficult to prove
or measure. Spokeo, 136 S. Ct. at 1549. Spokeo thus
soundly refutes the D.C. Circuits conclusion that
West Virginia lacked an injury-in-fact simply
because its harm could not be quantitatively
[]measure[d]. App. 6a.
Second, like the Ninth Circuit did in Spokeo, the
D.C. Circuit improperly elided the difference
between concreteness and particularity. 136 S. Ct. at
1548. As this Court explained in Spokeo,
concreteness and particularity are independent
requirement[s]. Ibid. This Court has made it clear
time and time again that an injury in fact must be
both concrete and particularized. Ibid. The D.C.
Circuit was wrong to conclude that West Virginia
lacks a concrete injury-in-fact because its injury is
not particular. App. 6a7a.

14
In short, the D.C. Circuits standing analysis is
flatly inconsistent with both core holdings in Spokeo.
It did not recognize that immeasurable injuries can
be sufficiently concrete, and it failed to fully
appreciate the distinction between concreteness and
particularization. Spokeo, 136 S. Ct. at 1550. For
this reason alone, the decision below cannot stand.
B. The decision below conflicts with this
Courts numerous decisions holding that
an intrusion on state sovereignty
constitutes an Article III injury-in-fact.
The D.C. Circuit also concluded that the Fixs
intrusion on West Virginias sovereignty is not a
particularized injury for purposes of Article III
standing. Recognizing its duty not to confus[e] any
perceived weakness on the merits with absence of
Article III standing, Ariz. State Legislature, 135
S. Ct. at 2663, the D.C. Circuit assumed West
Virginia correctly argued that the Fix is a breach of
State sovereignty in violation of the Tenth
Amendment. App. 7a. But the court concluded that
the infringement on West Virginias sovereignty was
analogous to a generally available grievance and
therefore insufficiently particular. Id.
This conclusion contradicts this Courts many
precedents recognizing that a breach of state
sovereignty is a legally-protected interest for
purposes of standing. The leading case is Alfred L.
Snapp & Son, Inc. v. Puerto Rico, ex rel., Barez, in
which this Court listed several easily identified
sovereign interests that can form the basis of a
States standing to bring suit, including the broad
interest in the exercise of sovereign power over

15
individuals and entities within [its] relevant
jurisdiction. 458 U.S. 592 (1982). Other cases
include: South Carolina v. Katzenbach, 383 U.S. 301
(1966), where this Court found South Carolina to
have standing based on an injury to its sovereign
reserved powers, id. at 324; and Maine v. Taylor,
477 U.S. 131 (1986), where this Court found that
Maine had standing based on its clear[] sovereign
interest in the continued enforceability of its own
statutes, id. at 137.4
In all of these casesnone of which were cited or
addressed by the D.C. Circuitthis Court treated a
breach of state sovereignty as a sufficiently
particularized injury when asserted by a state
plaintiff. And rightly so. For a state, no injury could
be more personal than a violation of its distinct
sovereign status. Spokeo, 136 S. Ct. at 1538 (For an
injury to be particularized, it must affect the
plaintiff in a personal and individual way.). As this
Court has explained, the States status as sovereign
entities affords them certain dignity. Federal
Maritime Comn v. South Carolina State Ports
Authority, 535 U.S. 743, 760 (2002).
The D.C. Circuits assertion that a breach of
state sovereignty is analogous to a generally
available grievance, App. 7a, misunderstands that
doctrine. Under Article III, a plaintiff must assert an
injury-in-fact particular to itself, not a generally
available grievance about governmentclaiming

For more cases, see Katherine Mims Crocker, Note, Securing

Sovereign State Standing, 97 Va. L. Rev. 2051, 206386 (2011)
(cataloguing state sovereign standing decisions).

16
only harm to his and every citizens interest in
proper application of the Constitution and laws, and
seeking relief that no more directly and tangibly
benefits him than it does the public at large. Lujan
v. Defenders of Wildlife, 504 U.S. 555, 57374 (1991)
(emphasis added). That is simply not the case here.
West Virginia is not claiming harm based solely on
every citizens interest in proper application of the
Constitution and laws. Ibid. It is claiming harm
based on its unique status as a distinct sovereign
from the Federal Government, which status this
Court has recognized makes States not normal
litigants for the purposes of invoking federal
jurisdiction. Massachusetts v. EPA, 549 U.S. 497,
51820 (2007); see also Fed. Maritime Comn, 535
U.S. at 751 (States, upon ratification of the
Constitution, did not consent to become mere
appendages of the Federal Government.).
To the extent the D.C. Circuits assertion is
based on the fact that all 50 states can assert the
same injury, a similar contention was rejected by
this Court in Massachusetts v. EPA. There, this
Court held that Massachusetts had standing even
though the injury it claimed was widely shared.
549 U.S. at 522. Quoting United States v. SCRAP,
this Court noted that standing is not to be denied
simply because many people suffer the same injury.
Massachusetts, 549 U.S. at 526 n.24 (quoting
SCRAP, 412 U.S. 669, 687 (1973)).
C. The decision below undermines this
Courts decision in Carter Coal.
Finally, the D.C. Circuit broadly concluded that
no entity (public or private) to whom the federal

17
government has unlawfully delegated authority to
set or enforce federal law would ever have standing
to challenge that delegation as unconstitutional.
App. 8a. West Virginia had argued that any recipient
of such delegated power should have the ability to
ask a court to relieve it of that unwanted
responsibility.
The
D.C.
Circuit
disagreed,
concluding that even if Congress gave the court the
authority to set federal electrical rates in the
country as we pleased, we certainly would not have
standing
to
challenge
that
delegation
as
unconstitutional. Ibid.
This sweeping conclusion undermines this
Courts holding in Carter v. Carter Coal Co., 298 U.S.
238 (1936). In that case, this Court reviewed an
attempt by Congress to delegate federal regulatory
authority to a non-federal entity. Congress had
enacted a statute that forced coal producers to join
an industry code under which certain code
members would make regulatory decisions for the
industry as a whole. Id. at 279. This Court struck
down the law as unconstitutional delegation in its
most obnoxious form. Id. at 311.
Under the D.C. Circuits categorical reasoning,
the very object of the most obnoxious delegation in
Carter Coal could not have asked a court to rid it of
that responsibility. At best, the D.C. Circuit leaves
open that a third party to the delegation could bring
suit. But that has the Article III standing analysis
exactly backwards. This Courts case law favors suits
brought by those directly and personally affected by
the challenged action. See Lujan, 504 U.S. at 560 n.1.
In contrast, when the plaintiff is not himself the

18
object of the government action or inaction he
challenges, standing is not precluded, but it is
ordinarily substantially more difficult to establish.
Id. at 562 (quoting Allen v. Wright, 468 U.S. 737, 758
(1984)).
The D.C. Circuit dismissed Carter Coal on the
ground that the case did not explicitly discuss
standing. App. 7a. That misses the point. The issue
is that the holding of Carter Coal would have very
little force if no one has standing to bring suit
against similarly obnoxious delegations. And as
discussed above, the entities with the strongest case
to do sothose most clearly affected in a concrete
and particularized way by such delegationsare
the delegees. Here, that entity is West Virginia.
II. The D.C. Circuits decision removes an
important
check
on
the
Federal
Governments role in our system of dual
sovereignty.
A. The federal-state enforcement regime at issue
in this case is an example of a cooperativefederalism regime. Such arrangements give States
the option of acting in accordance with federal policy,
but if they refuse, the full regulatory burden will be
borne by the Federal Government. Hodel v. Virginia
Surface Mining & Reclamation Assn, 452 U.S. 264,
289 (1981) (emphasis added). They have been
replicated in numerous federal statutory schemes
and upheld by both this Court and lower courts
against Tenth Amendment challenges. New York v.
United States, 505 U.S. 144, 16667 (1992); see also
Hodel, 452 U.S. at 289.

19
This Court has expressly endorsed these regimes
as a careful and constitutionally permissible balance
between the powers of the Federal Government and
the States. These regimes do not unconstitutionally
coerce the States into implementing federal policy if
Congress has the power to preempt the States and
has committed to do so in the event the States choose
not to act. Hodel, 452 U.S. at 28990; see also New
York, 505 U.S. at 167 ([W]here Congress has the
authority to regulate private activity under the
Commerce Clause, we have recognized Congress
power to offer States the choice of regulating that
activity according to federal standards or having
state law pre-empted by federal regulation.). Under
those important conditions, where the Federal
Government can and is committed to serve as a
backstop, the States retain the critical ability to
choose not to be accountable for the enforcement or
non-enforcement of federal law. New York, 505 U.S.
at 16869.
But the D.C. Circuits decision encourages the
Federal Government to legislate a cooperativefederalism regime and then abandon its crucial
backstop role. As even the D.C. Circuit must admit,
the Federal Government in this case abandon[ed]
its statutorily mandated backup role and left the
States holding the bag. App. 3a. Where the States
previously had the choice to be free from political
accountability, they now must assume the political
responsibility of deciding whether or not to
implement a federal statute. App. 6a; see also ibid.
(We do not doubt that West Virginia now confronts
different political terrain than it did before HHS
announced its new non-enforcement policy.). Yet the

20
D.C. Circuit has determined that the Statesthe
very entities meant to be protected by the careful
balancing of a cooperative-federalism regime
cannot even ask a court to review the Federal
Governments decision to fundamentally alter that
regime. And as noted by at least one judge at oral
argument, it is unclear that any other entity would
have a better case for standing than the States.5
Heightening the concern over this decision is the
outsized role that the D.C. Circuit plays in
administrative law and cooperative-federalism cases.
This decision will be precedential in cases where the
D.C. Circuit has exclusive jurisdiction, including
many under cooperative-federalism statutes like the
Clean Air Act and the Clean Water Act. And even
where it is not precedential, the D.C. Circuits
perceived expertise in these areas of law will give
this decision extra weight. Cf. Perez v. Mortgage
Bankers Assn, 135 S. Ct. 1199 (2015) (granting
certiorari to reverse an erroneous interpretation of
the
Administrative
Procedure
Act
followed
exclusively by the D.C. Circuit); Milner v. Dept. of
Navy, 562 U.S. 562, 567 (2011) (tracing to a single
D.C. Circuit decision an erroneous interpretation of
the Freedom of Information Act that had been
followed by several courts of appeal).
B. Though the conflicts with this Courts
precedents are alone enough to warrant certiorari,

See Oral Argument Audio, No. 15-5309 (Apr. 15, 2016),

available at https://www.cadc.uscourts.gov/recordings/record
ings2016.nsf/4A35E20046482D7985257F96006585FB/$file/155309.mp3 (colloquies from 25:00 to 29:33; 34:40 to 35:10).

21
these concerns about the decisions consequences for
the federal-state balance confirm the need for this
Courts intervention. The judiciary is critical to
protecting the States residuary and inviolable
sovereign interests from intrusion by the Federal
Government by deciding controversies relating to
the boundary between the two jurisdictions. The
Federalist No. 39, at 31819 (James Madison)
(Clinton Rossiter ed., 1961). As this Court has said,
States are not normal litigants for the purposes of
invoking federal jurisdiction, precisely because they
have surrender[ed] certain sovereign prerogatives
to the Federal Government and still retain unique
sovereign and institutional interests. Massachusetts,
549 U.S. at 520. The D.C. Circuits decision takes an
improperly cramped view of the judiciarys role and
must be revisited.
Even if the new Administration were to rescind
the Administrative Fix or if the Affordable Care Act
were to be repealed in whole or in part, the D.C.
Circuits decision cannot be permitted to stand. As a
threshold matter, the underlying issue would
arguably fall within an exception to mootness. The
practice of claiming enforcement discretion to
entirely suspend federal laws for temporary periods
of time is likely to recur and continue to escape
review. See Kingdomware Techs., Inc. v. United
States, 136 S. Ct. 1969, 1976 (2016). Moreover, the
voluntary cessation of challenged conduct does not
ordinarily render a case moot. Knox v. Serv.
Employees Intl Union, Local 1000, 132 S. Ct. 2277.
But more importantly, even if this Court were to
determine that the matter has become moot or that

22
mootness should be evaluated in the first instance by
the D.C. Circuit, this Court should still grant
certiorari and vacate the decision below before
remanding for further consideration. The clear
conflicts between the D.C. Circuits decision and
several of this Courts precedents, together with the
decisions potentially significant impact on federalstate relations, require that this Court take at least
those steps to ensure consistency and protect our
system of dual sovereignty.
CONCLUSION
The petition for a writ of certiorari should be
granted and the judgment of the U.S. Court of
Appeals for the D.C. Circuit should be vacated.

23
Respectfully submitted,
Patrick Morrisey
Attorney General
Elbert Lin
Solicitor General
Counsel of Record
Julie Marie Blake
Assistant Attorney General
Office of the Attorney General
State Capitol
Building 1, Room E-26
Charleston, WV 25305
[email protected]
(304) 558-2021
Counsel for Petitioner
November 28, 2016

App. 1a
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
-----------------------------------------------------------------------

Argued April 15, 2016

Decided July 1, 2016

No. 15-5309
STATE

OF

WEST VIRGINIA, EX REL.PATRICK MORRISEY,

APPELLANT
v.
UNITED STATES DEPARTMENT OF
HEALTH AND HUMAN SERVICES,
APPELLEE
-----------------------------------------------------------------------

Appeal from the United States District Court

for the District of Columbia
(No. 1:14-cv-01287)
-----------------------------------------------------------------------

Elbert Lin, Solicitor General, Office of the

Attorney General for the State of West Virginia,
argued the cause for appellant. With him on the briefs
were Patrick J. Morrisey, Attorney General, and Julie
Marie Blake, Assistant Attorney General.
Lindsey Powell, Attorney, U.S. Department of
Justice, argued the cause for appellee. With her on the
brief were Benjamin C. Mizer, Principal Deputy
Assistant Attorney General, and Alisa B. Klein and
Mark B. Stern, Attorneys.

App. 2a
Before: KAVANAUGH and WILKINS, Circuit Judges,
and SILBERMAN, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
SILBERMAN.
SILBERMAN, Senior Circuit Judge: This is rather
an unusual case. West Virginia has sued to challenge
the Presidents determination not to enforce certain
controversial provisions of the Affordable Care Act for
a transitional period. That decision, implemented by a
letter from the Secretary of the Department of Health
and Human Services, left the responsibility to enforce
or not to enforce these provisions to the States, and
West Virginia objects to being put in that position. We
conclude that West Virginia, not having suffered an
injury-in-fact, lacks standing.
I.
The Act, as is well known, mandated minimum
coverage requirements for all health insurance plans
offered in the individual market.1 And it has been
common in national health care law to employ a dual
federal-state enforcement mechanism.2 Typically the
1
Among other rules, policies are limited in what can be
factored into price variation, must be extended regardless of
certain traditional barriers such as medical history and health
status, and may not discriminate on several bases traditionally
used to tailor plans to individual consumers. See generally 42
U.S.C. 300gg-300gg-6, 300gg-8.
2
See generally U.S. Dept of Treasury v. Fabe, 508 U.S. 491,
500 (1993). The Act primarily amended the Public Health Service
Act.

App. 3a
States have the initial responsibility to enforce the law,
but if the States decline or fail to enforce, the federal
government is a backup enforcer. That approach was
followed in the Affordable Care Act provisions. See 42
U.S.C. 300gg-22(a)(1).
Insurance companies responded quickly to the
new requirement. Millions of cancellation notices were
sent out in the fall of 2013, warning policyholders their
plans would be illegal once the new regulation took
effect. All hell broke loose as policies were cancelled,
leading to Congressional promises to modify the law to
prevent cancellations.
The President acted, allegedly, to pre-empt
Congress. He announced the federal government
would hold off on enforcing the statutory
requirements. Accordingly, HHS sent a letter to the
States announcing a transitional policy, allowing
health insurers with certain conditions3 to continue
policies that would be outlawed under the statute for a
period of a year (later extended for another three
years).
That left the States holding the bag. They had to
decide whether to enforce or not to enforce the very
conditions that the federal government determined to
abandon for the transitional period. West Virginia
initially decided to enforce, but after HHS extended
3

Insurers were required to make disclosures to policyholders

about the noncompliance of their plans, as well as make
information available for enrollment in another, compliant plan,
should the holder so choose.

App. 4a
the transitional period, West Virginia opted to decline
to enforce the mandates.
The State brought suit for declaratory and
injunctive relief. It argued that the new policy violates
the plain language of the Act, which mandates that
the Secretary shall enforce the requirements, when
States do not. While there may be room for case-bycase enforcement discretion, the State claimed, HHS
was not at liberty to decline wholesale enforcement of
the provisions.4 Moreover, the State claimed the new
policy violated the APA because it amounted to a
substantive and binding rule that was issued without
the required notice-and-comment.
West Virginia also brought two constitutional
claims. It contended that the federal non-enforcement
policy unlawfully delegated away federal executive
authority. And it argued that the policy violated the
Tenth Amendment by foisting upon States the final
and determinative decision as to whether the Acts
market requirements would be enforced within the
State itself. This, the State alleged, blurred the lines of
political accountability identified as crucial in previous
cases such as Printz v. United States, 521 U.S. 898
4

A similar argument was levied against Administration

immigration policy. See Texas v. United States, 809 F.3d 134 (5th
Cir. 2015), cert. granted, 136 S. Ct. 906 (U.S. Jan. 19, 2016)
(No. 15-674). Unlike the States in the Texas case, however, the
State of West Virginia has not argued (presumably because it
cannot argue) that the federal governments decision not to
enforce the statute has itself imposed monetary costs on West
Virginia.

App. 5a
(1997), and New York v. United States, 505 U.S. 144
(1992).
Perhaps the most peculiar aspect of the case is the
preferred remedy sought. West Virginia seeks a
declaratory judgment that the Administrations
actions are illegal, but not vacatur of the Secretarys
letter, apparently to induce the Administration to
negotiate a statutory fix from Congress. Only if that
failed would equitable relief be sought.
The district court concluded West Virginia lacked
standing because it had not suffered an injury-in-fact,
and this appeal followed.
II.
Although Appellant challenges the federal
governments decision to decline enforcement, West
Virginia conceded at oral argument that its claim of
injury-in-fact is identical to that which would exist if
Congress had initially provided that only States had
authority to enforce the federal mandate. It is claimed
that if Congress were to do that, it would be illegally
enlisting States to bear the responsibility, politically, to
decide whether to enforce, or implement, a federal
statute. In this case, instead, it is the federal
governments enforcement decision that allegedly
created the same injury. But we simply do not
understand why, in either case, the grant of that
discretion to the States creates an injury-in-fact.

App. 6a
Appellant relies on the Supreme Court case
holdings, in Printz and New York, that federal statutes
that compel States to implement those statutes violate
the Constitution. The closer case, Printz, did hold that
a statute requiring state legal officers to conduct
background checks on gun purchases was
unconstitutional (based primarily on implications
from the structure of the Constitution). But in their
opinion, the majority explained the key to its
conclusion was that the State was compelled to carry
out a federal command. See Printz, 521 U.S. at 924-35.
The same was true in New York, which involved a
federal law that required States to either pass
legislation dealing with radioactive waste disposal, or
to take title to and possession of it. See New York, 505
U.S. at 151-54. Since in both cases the States were
compelled to act, no issue of standing was even raised
or discussed.
Appellant would extend those cases to the
proposition that when the federal government
abandons enforcement of a federal statute, leaving
States with the responsibility (or, for that matter,
Congress delegates discretion to implement a federal
statute directly to a state), that also is
unconstitutional. Requiring the States to assume the
political responsibility of deciding whether or not to
implement a federal statute supposedly creates an
injury-in-fact.
There is simply no support for this extraordinary
claim. Although Appellant dresses up its argument as
a breach of State sovereignty in violation of the Tenth

App. 7a
Amendment, its injury is nothing more than the
political discomfort in having the responsibility to
determine whether to enforce or notand thereby
annoying some West Virginia citizens whatever way it
decides. And no court has ever recognized political
discomfort as an injury-in-fact. We do not doubt that
West Virginia now confronts different political terrain
than it did before HHS announced its new nonenforcement policy. But we do not think that
represents cognizable legal injury. Increased political
accountability of this naturegreater likelihood of
political consequence in making a decisionis the kind
of inherently immeasurable harm that our standing
doctrines have been designed to screen out. Time, and
time again, it has been stressed that an injury must be
concrete. See Lujan v. Defs. of Wildlife, 504 U.S. 555,
560 (1992).
Rather cleverly, West Virginia insistswhich is
generally truethat we must assume the merits of its
claim when determining whether standing exists. See
City of Waukesha v. EPA, 320 F.3d 228, 235 (D.C. Cir.
2003). Therefore, we have to acknowledge, according
to Appellant, that the claimed encroachment into the
States sovereignty was an injury-in-fact. Still, even
assuming that the administrations action created a
theoretical breach of State sovereignty, West Virginia
nevertheless lacks a concrete injury-in-fact. The case is
analogous to those in which the governments actions
are asserted to be unconstitutional but the plaintiff
raises only a generally available grievance; its injury
is not particular. See Lujan, 504 U.S. at 573-74.

App. 8a
West Virginias secondary argument is that any
party, whether or not a governmental entity, has
standing to challenge a delegation from the
government to carry out a governmental responsibility.
For that proposition, Appellant relies on Carter v.
Carter Coal Co., 298 U.S. 238 (1936). Without
belaboring the complexities of that case, it is sufficient
to note that standing was never discussed so, as is well
known, the case is not a precedent for standing. See,
e.g., Will v. Mich. Dept of State Police, 491 U.S. 58, 63
n.4 (1989). In any event, Appellants claim is an
untenable stretch. For instance, if Congress gave the
D.C. Circuit authority, so long as we chose to use it, to
set electrical rates in the country as we pleased, we
certainly would not have standing to challenge that
delegation as unconstitutional. Nor would the
Secretary of Energy, if given the same authority.5
*

For the foregoing reasons, the district court is

affirmed.
So ordered.

The requested remedyremand without vacatur, so as to

goad the President into working with Congress for a legislative
solutionfurther suggests that Appellants claim is basically a
policy-based dispute.

App. 9a
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
State of West Virginia, )
)
Plaintiff,
)
v.
)
United States
)
Department of Health )
and Human Services,
)
)
Defendant.
)

Civil No.
1:14-cv-01287 (APM)

MEMORANDUM OPINION
(Filed Oct. 30, 2015)
I.

INTRODUCTION

As part of the Patient Protection and Affordable

Care Act (ACA or the Act), all individual health
insurance plans are required to comply with eight
federally mandated market requirements, unless a
plan qualifies for a grandfathering exception.
Responsibility for the enforcement of these market
requirements is shared by the federal government and
the States. The ACA does not compel the States to
enforce the market requirements, but provides them
with the option of doing so if they desire. If a State
declines to enforce the Act or does so inadequately, the
ACA provides that the Secretary [of Health and
Human Services] shall enforce the Acts provisions in
such State.

App. 10a
Initially, all health insurance plans that went into
effect or were renewed after January 1, 2014, were
required to be compliant with the ACAs eight market
requirements. However, after some individuals and
small businesses received cancellation notices from
their insurance companies, the federal government
through Defendant Department of Health and Human
Services (HHS)instituted a change in policy (the
Administrative Fix1 or the Fix). On November 14,
2013, HHS announced that, subject to certain
conditions, it would refrain from enforcing the eight
market requirements through October 1, 2014, thereby
allowing consumers to retain coverage under noncompliant policies until that date. HHS further
announced that it would encourage States to follow the
federal governments lead and refrain from enforcing
the eight market requirements. States, however,
remained free to enforce the market requirements if
they so wished. On March 5, 2014, HHS extended the
Administrative Fix until October 1, 2016.
Plaintiff State of West Virginia brought this action
to challenge the Administrative Fix, claiming that the
Fix violates the Affordable Care Act and the
Administrative Procedure Act; constitutes an unlawful
delegation of federal executive and legislative power to
the States; and contravenes state sovereignty under
the Tenth Amendment. The merits of the States
1

For convenience in referring to the record, the court has

decided to use the term used by Plaintiffthe Administrative
Fixto describe the policy change. In its pleadings, Defendant
refers to the same policy as the Transitional Policy.

App. 11a
contentions, however, must take a back seat to the
threshold issue advanced by HHS in its Motion to
Dismiss: that West Virginia lacks standing to
challenge the Administrative Fix.
West Virginia asserts that it has standing because
the Administrative Fix forces it to make an untenable
choice: either regulate under the ACA or decline to
regulate, in which case noncompliant policies will be
sold within West Virginias borders because of HHS
policy decision not to enforce the ACAs market
requirements. These circumstances, West Virginia
argues, have caused it to suffer two cognizable injuries.
First, West Virginia contends that HHS policy decision
not to enforce the ACA has shifted enforcement
responsibility to the State and made it the exclusive
and unfettered enforcer of the ACAs eight market
requirements within its borders. This purported
shifting of enforcement responsibility, West Virginia
claims, has caused it to suffer an anticommandeering injury under the Tenth Amendment.
Second, West Virginia contends that the shift in
enforcement responsibility has made the federal
government less politically accountable for the nonenforcement of the ACA at the expense of the States.
West Virginia alleges that this heightened political
accountability to its own citizens constitutes a
cognizable injury.
The court rejects these arguments and concludes
that West Virginia lacks standing to challenge the
Administrative Fix. The States asserted injuries are

App. 12a
not the kind of concrete and particularized injury-infact that is actual or imminentand not conjectural or
hypotheticalthat is required to establish standing
under the standards set by Lujan v. Defenders of
Wildlife, 504 U.S. 555 (1992). Therefore, because this
court lacks subject matter jurisdiction over this matter,
the court grants Defendants Motion to Dismiss.
II.

BACKGROUND
A. Factual Background

Congress enacted the Patient Protection and

Affordable Care Act (ACA or the Act) on March 23,
2010. Def.s Mem. in Supp. of Mot. to Dismiss, ECF
No. 13-1, at 4 [hereinafter Def.s Mem.]. Among the
reforms initiated by the ACA was a requirement that
all individual health insurance plans that went into
effect or were renewed after January 1, 2014, were to
meet eight federally mandated market requirements,
unless they fell under a grandfathering exception.
Compl., ECF No. 1, 20.
The ACA established a regime of cooperative
federalism to enforce these requirements. Under the
Act, States are the first line of enforcement and can
elect to use their resources to enforce the ACA,
consistent with their own state laws. Id. 25-26; 42
U.S.C. 300gg-22(a)(1) ([E]ach State may require that
health insurance issuers . . . meet the requirements of
this part with respect to such issuers.). If a State
elects not to enforce the market requirements, the ACA
then tasks the Secretary of the Department of Health

App. 13a
and Human Services (HHS) with making a
determination as to whether a State has failed to
substantially enforce a provision (or provisions) in this
part with respect to health insurance issuers in the
State. 42 U.S.C. 300gg-22(a)(2). If the Secretary
makes such a determination, the ACA provides that
the Secretary shall enforce such provision (or
provisions) . . . in such State. Id. (emphasis added). In
other words, if a State decides not to enforce the
market requirements, the ACA authorizes the federal
government to enforce the market requirements
within a States boundaries.
In 2013, before the ACAs market requirements
went into effect, health insurance companies began
sending insurance cancellation letters to customers
whose plans were neither covered by the
grandfathering exception nor compliant with the ACAmandated market requirements. Compl. 35. In
response to those cancellations, on November 14, 2013,
HHS instituted a policy changewhat West Virginia
refers to as the Administrative Fixand announced
that it would not, subject to two conditions, enforce the
eight ACA-mandated market requirements until
October 1, 2014. Id. 40, 44-45. Health insurers
would be permitted to continue selling non-compliant
insurance coverage as long as (1) the plans had been in
effect on October 1, 2013, and (2) the insurers informed
affected customers of their plans non-compliance and
the existence of the ACAs health insurance exchanges.
Id. 45-46. HHS encouraged the States to adopt the
same transitional policy and thus to refrain from statelevel enforcement of the market reforms. Id. 49 & Ex.

App. 14a
6 at 3. On March 5, 2014, HHS extended the
Administrative Fix until October 1, 2016. Id. 51-52.
West Virginia believes that its citizens should be
able to keep their individual health insurance plans if
they like them. E.g., id. 6. To that end, and in
anticipation of the Act going into effect, West Virginia
had given insurance carriers the option to permit
early renewal for 2013 policyholders, so that they
could extend their current, possibly non-compliant
insurance plans through 2014. Compl., Ex. 13, at 2.
Due to this prior action, West Virginia Insurance
Commissioner Michael D. Riley initially announced
that West Virginia would not accommodate the
Administrative Fix because individuals and
businesses had already made extensive changes to
comply with the new law. Compl. 80-81 (internal
citation omitted) (internal quotation marks omitted).
After HHS extended the Administrative Fix until
2016, Commissioner Riley announced that West
Virginia would refrain from enforcement. Id. 82-83.
The State committed not to restrict the renewal of
certain non-compliant plans for policy years that end
by October 2017, and left it up to the [insurance]
carriers as to whether they want[ed] to offer noncompliant plans through that much longer period. Id.
(citation omitted) (internal quotation marks omitted).
B. Procedural Background
Four months after HHS extended the
Administrative Fix, West Virginia filed this lawsuit. Its

App. 15a
Complaint specifies the nature of its alleged injury.
West Virginia alleges that the Administrative Fix
caused it injury by forc[ing it] to become the sole and
exclusive enforcer of federal law within its borders
and by reduc[ing] the political accountability of the
federal government at the expense of the States. Id.
68-69.
Soon after it filed its Complaint, West Virginia
filed a Motion for Summary Judgment. ECF No. 7.
HHS then moved to stay proceedings on the Motion for
Summary Judgment, so that the court first could
resolve the question of its subject matter jurisdiction
over this suit. ECF No. 10. Judge Walton, who was then
presiding over this case, granted HHS motion, staying
further briefing on West Virginias Summary
Judgment Motion. Order, ECF No. 17.
HHS filed its Motion to Dismiss on October 17,
2014. ECF No. 13. The court heard argument on the
Motion on September 3, 2015. ECF No. 32.
III. LEGAL STANDARD
On a motion to dismiss brought, as here, under
Federal Rule of Civil Procedure 12(b)(1), a federal
court must presume that it lack[s] jurisdiction unless
the contrary appears affirmatively from the record.
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n.3
(2006) (citation omitted) (internal quotation marks
omitted). The burden of demonstrating the contrary,
including establishing the elements of standing, rests
upon the party asserting jurisdiction. Kokkonen v.

App. 16a
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994);
Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992).
Standing must be demonstrated for each claim and
for each form of relief sought, DaimlerChrysler, 547
U.S. at 352 (citation omitted) (internal quotation marks
omitted), with the manner and degree of evidence
required at the successive stages of litigation, Lujan,
504 U.S. at 561.
Further, on a motion to dismiss, the court must
accept well-pleaded factual allegations as true and
draw all reasonable inferences from those allegations
in the plaintiff s favor. Arpaio v. Obama, 797 F.3d 11,
19 (D.C. Cir. 2015). The court need not, however,
assume the truth of legal conclusions, see Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009), nor accept inferences
that are unsupported by the facts set out in the
complaint, Islamic Am. Relief Agency v. Gonzales, 477
F.3d 728, 732 (D.C. Cir. 2007). Threadbare recitals of
the elements of [standing], supported by mere
conclusory statements, do not suffice. Iqbal, 556 U.S.
at 678. If a complaint does not contain sufficient
factual matter to state a claim [of standing] that is
plausible on its face, it must be dismissed. Id. (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see
generally Arpaio, 797 F.3d at 19-20 (setting forth the
standard of review for a motion to dismiss that asserts
a lack of standing under Rule 12(b)(1)). In evaluating
a Rule 12(b)(1) motion, a court has broad discretion to
consider relevant and competent evidenceincluding
materials outside the pleadings. Finca Santa Elena,
Inc. v. U.S. Army Corps of Engrs, 873 F. Supp. 2d 363,

App. 17a
368 (D.D.C. 2012) (citing 5B Charles Wright & Arthur
Miller, Federal Practice & Procedure 1350 (3d ed.
2004)).
IV. DISCUSSION
Under Article III of the U.S. Constitution, the
jurisdiction of the federal courts is limited to Cases
and Controversies. Art. III, 1. The Constitution
does not define either of those terms, and so federal
courts have developed the doctrine of standing to
identify exactly which cases and controversies fall
within the scope of federal jurisdiction. Lujan, 504 U.S.
at 560. At a minimum, in order to establish that it has
standing, a plaintiff must allege: (1) injury-in-fact
suffered by the plaintiff; (2) a causal connection
between the injury and the complained-of conduct; and
(3) a likelihood that the injury will be redressed by a
favorable decision from the court. Id. at 560-61
(citation omitted) (internal quotation marks omitted).
Although HHS contends that West Virginia cannot
meet any of the three elements, Def.s Mem. at 11-13,
the court only focuses on the firstinjury-in-fact.
A. West Virginias Alleged Injuries
Even a cursory reading of West Virginias
Complaint reveals that the injuries it asserts are not
among the traditional kinds of injuries that the
Supreme Court has recognized as sufficient to confer
standing on a State that is challenging federal action.
West Virginia does not claim that the Administrative

App. 18a
Fix has caused it to suffer any financial injury. See, e.g.,
Natl Fedn of Indep. Small Bus. v. Sebelius, 132 S. Ct.
2566, 2604-05 (2012); Tr. of Oral Arg., ECF No. 32, at
19 [hereinafter Tr.] (conceding that West Virginia has
not expended any state funds as a result of the
Administrative Fix). Nor does it allege that it has been
compelled by the federal government to take a specific
action. See, e.g., New York v. United States, 505 U.S. 144,
160 (1992); Pl.s Oppn to Mot. to Dismiss, ECF No. 20,
at 30-31 [hereinafter Pl.s Oppn] (The State has not
claimed harm from having to take any particular
action.). Nor does it contend that it brings this action
in its capacity as parens patriae to protect its citizens
interests. See, e.g., Alfred L. Snapp & Son, Inc. v. Puerto
Rico, 458 U.S. 592, 597-610 (1982); Compl. 67-79
(describing the alleged injury to West Virginia without
any mention of harm to its citizens); Pl.s Oppn at
16-30 (same).
Instead, West Virginia alleges that it has suffered
two, less traditional types of injury: (1) harm from
being forced to become the sole and exclusive enforcer
of federal law within its borders, Compl. 68, and
(2) harm from the Administrative Fix reduc[ing] the
political accountability of the federal government at
the expense of the States, id. 69. Though West
Virginia presents these as distinct harms, the court
agrees with HHS that, upon closer scrutiny, they
actually collapse into one injury: the enhanced
political accountability that the State will suffer at
the hands of its citizens who wish to see the ACAs
market reforms enforced.

App. 19a
West Virginias own briefing demonstrates the
unity of its two alleged injuries. West Virginias second
asserted injurythat the Administrative Fix reduced
the political accountability of the federal government
at the expense of the States, id.is a straightforward
allegation of injury to the States political
accountability, as evident from the very text of its
description. West Virginias first alleged injurythat
it has been forced to become the sole and exclusive
enforcer of federal law, id. 68is also, at its core, an
allegation of harm to political accountability, although
the State does not explicitly frame it as such. The State
argues that the Administrative Fix forces the State to
one of two paths, either of which imposes
constitutionally cognizable harms. Pl.s Oppn at 18.
On one hand, West Virginia contends, [i]f West
Virginia chooses to enforce federal law, it will be
required to expend financial resources and will risk the
displeasure of those individuals who lose their health
insurance plans. Id. at 18-19 (emphasis added). On
the other hand, the State claims, [i]f West Virginia
continues on its present course and refuses to enforce
the ACAs market requirements, it will suffer blame
from those who believe the ACA forwards important
policy ends and who wish to see the law fully enforced.
Id. at 19 (emphasis added). As West Virginia has
elected not to enforce the ACAs market requirements,
Compl. 83; Tr. 2-4, 18, its claimed injury then is the
blame that will be cast upon the State by some of its
citizens for declining to enforce the ACA and
permitting non-compliant plans to be sold within the
State.

App. 20a
West Virginias statements at oral argument,
similar to its briefing, make clear that the two injuries
it alleges are really the same. The injury is that we
are the exclusive enforcer of federal law, the State
argued, and we are, therefore, held accountable
whatever choice you makeas a legal matter. Tr. 20.
The State also agreed that its injury was the political
consequences or the political accountability that flows
from having to make the choice presented by the
Administrative Fix. Id. Additionally, West Virginia
admitted that its two allegations of injury could, in
fact, be viewed as the same injury, with the only
distinction being that the claimed harm of increased
political accountability was available only to the
States. Id. 20-21 (stating that the difference between
the two theories of standing is that one would only be
able to be invoked by states . . . . [W]hereas, the other
theory is a broader theory that would apply to anyone
thats been made the exclusive enforcer of federal law,
whether it would be a private party or the state).2

Similarly, in its Motion for Summary Judgment, West

Virginia stated that concerns about political accountability are
at the core of the anti-commandeering doctrine. Pl.s Mem. in
Supp. of its Mot. for Summ. J., ECF No. 7-1, at 30 [hereinafter
Pl.s Mem. for Summ. J.].

App. 21a
1. West Virginias Assertion that Political
Accountability Is Relevant Only to the
Merits
Despite having staked out this clear position, West
Virginia seemingly attempted to change course at oral
argument. It argued:
[O]ur injury is not political accountability. I
want to be absolutely clear about that. Our
injury is that we were commandeered in
violation of our Tenth Amendment rights
under the Constitution . . . . Political
accountability is how we have made our
arguments on the merits.
Tr. 21 (emphasis added).
West Virginia, however, cannot change horses in
the middle of the race. As its Complaint makes clear,
West Virginia defines the alleged harm to its
sovereignty in terms of injury to political
accountability, and it does not restrict that argument
only to the merits. Under the section heading Injury
to the State of West Virginia from the Administrative
Fix, West Virginia alleges that, [u]nder the
Administrative Fix, the lines of political accountability
are far less certain . . . . [T]he Administrative Fix
createsat a minimumconfusion as to which
government is actually to blame for the ACAs policies.
Compl. 71. Later, under the same heading, West
Virginia asserts that this blurred political
accountability diminishes the sovereignty of West
Virginia . . . by interfering with the relationship
between state officials and their constituents,

App. 22a
inhibiting the ability of elections to properly hold
government and public officials accountable, and
harming the reputation and dignity of the States and
their officials and agencies. Id. 76. West Virginia
avers that it was precisely the point of the
Administrative Fix[ ] to shift political accountability
for the ACAs eight federally mandated market
requirements and their enforcement to the States. Id.
125; see also id. 72-73.
West Virginia echoes these allegations in its
opposition brief. It argues that the Administrative Fix
violates the Tenth Amendment because its grant of
exclusive enforcement responsibility to the States
improperly shifted political accountability from the
Federal Government to the States, Pl.s Oppn at
14-15, and that the State . . . has standing to protect
its sovereign interest against being held politically
accountable for federal policy, id. at 20-21. West
Virginia further contends that its sovereignty is at risk
because the Fix impermissibly shifts political
accountability for the enforcement or non-enforcement
of the ACAs federal market requirements from the
Federal Government to the States, including to West
Virginia. Pl.s Oppn at 23-24; see also, e.g., id. at 15,
17, 20-21, 27, 31.3

West Virginias Motion for Summary Judgment advances

these same arguments. Its motion asserts that States have a
protectable sovereign interest in not being held politically
accountable by their citizens for the enforcement or
nonenforcement of federal law within their borders . . . and that
State officials suffer such cognizable sovereign harm when they

App. 23a
As the foregoing passages make clear, West
Virginias allegations and arguments about political
accountability do not pertain only to the merits of its
challenge to the Administrative Fix. Rather, those
allegations and arguments go to the very heart of its
asserted basis for standing, to which the court now
turns.
B. Injury to Political Accountability as InjuryIn-Fact
To successfully allege injury-in-fact, a plaintiff
must contend that it has suffered an invasion of a
legally protected interest which is (a) concrete and
particularized . . . and (b) actual or imminent, not
conjectural or hypothetical. Lujan, 504 U.S. at 560
(citation omitted) (internal quotation marks omitted).
Although States are not normal litigants for
purposes of standing, Massachusetts v. E.P.A., 549 U.S.
497, 518 (2007), and have interests and capabilities
beyond those of an individual by virtue of their
sovereignty, Oregon v. Legal Servs. Corp., 552 F.3d 965
(9th Cir. 2009) (citing E.P.A., 549 U.S. at 518-20), they
too must allege a cognizable injury-in-fact to establish
standing, see E.P.A., 549 U.S. at 516-23. The court
concludes that West Virginia has failed to do so here.
Its claimed injury of political accountability is not an
are forced to bear the brunt of public disapproval for a federal
program . . . or are held politically accountable for the federal
program. Pl.s Mem. for Summ. J., ECF No. 7-1, at 39 (citations
omitted) (internal quotation marks omitted); see generally id. at
35-40.

App. 24a
invasion of a legally protected interest that is
concrete and particularized and not conjectural or
hypothetical. Lujan, 504 U.S. at 560 (citation omitted)
(internal quotation marks omitted).
For starters, the States interest in avoiding
greater political accountability relative to the federal
government is not the kind of sovereign state interest
that the Supreme Court has recognized as giving rise
to standing if allegedly infringed. West Virginias
claimed injury does not involve the States interest in
the enforcement of its own laws. See Snapp, 458 U.S. at
601 (identifying as a sovereign interest the power to
create and enforce a legal code, both civil and
criminal). It does not involve a demand that West
Virginias sovereignty be recognized by another state.
See id. (identifying as a sovereign interest the demand
for recognition from other sovereigns). It does not
involve the States real property, see E.P.A., 549 U.S. at
519 (recognizing Massachusetts well-founded desire
to preserve its sovereign territory); its public fisc, see
Natl Fedn of Indep. Small Bus., 132 S. Ct. at 2604-05
(holding that the threatened loss of over 10 percent of
a States overall budget . . . is economic dragooning
that leaves the States with no real option but to
acquiesce in a federal demand); or another form of
proprietary interest, see Snapp, 458 U.S. at 601
(observing that a State is bound to have a variety of
proprietary interests . . . [such as] own[ing] land or
participat[ing] in a business venture). It also does not
involve resolution of public nuisances, id. at 603
(recognizing a states interest in represent[ing] the

App. 25a
interests of their citizens in enjoining public
nuisances); preservation of its citizens economic or
physical well-being, id. at 607 ([A] State has a quasisovereign interest in the health and wellbeingboth
physical and economicof its residents in general.);
or protection of its citizens interest in participating in
the federal system of government, id. at 608
(recognizing as a quasi-sovereign interest that the
State and its residents are not excluded from the
benefits that are to flow from participation in the
federal system). And it does not involve state action
actually coerced, or even allegedly coerced, by the
federal government. See, e.g., New York, 505 U.S. at 161
(recognizing that the States have a cognizable interest
in whether Congress may direct or otherwise
motivate the States to regulate in a particular field or
a particular way).
Instead, West Virginias claimed injury, at bottom,
involves a general desire to challenge the legality of a
federal action, relying on the abstract concept of
political accountability to define its alleged harm,
which itself is rooted in abstract concepts of federalism
and state sovereignty. The Supreme Court held long
ago, however, that a States general challenge to the
lawfulness of federal action, predicated on an abstract
injury to the States sovereignty, is not sufficient to
confer standing. See Massachusetts v. Mellon, 262 U.S.
447, 484-85 (1923).
In Mellon, the Commonwealth of Massachusetts
challenged the federal Maternity Act. Id. at 479. The
Maternity Act presented the States with a simple

App. 26a
choice: either accept federal funds and the conditions
attached to those funds to implement the Maternity
Act or decline to do so. Id. Massachusetts elected not to
opt into the Act, but nevertheless challenged it on the
ground that it invades the local concerns of the state,
and is a usurpation of power, viz., the power of local
self-government, reserved to the states. Id. at 480. The
Court began with the observation that Article IIIs
case or controversy requirement meant that the
federal courts are not open to the States merely
because a state is a party, but only where it is a party
to a proceeding of judicial cognizance. Id. The Court
then asked:
What, then, is the nature of the right of the
state here asserted and how is it affected by
this statute? . . . [W]hat burden is imposed
upon the states, unequally or otherwise?
Certainly there is none, unless it be the
burden of taxation, and that falls upon their
inhabitants, who are within the taxing power
of Congress as well as that of the states where
they reside. Nor does the statute require the
states to do or to yield anything. If Congress
enacted it with the ulterior purpose of
tempting them to yield, that purpose may be
effectively frustrated by the simple expedient
of not yielding.
Id. at 482 (emphasis added). Determining that
Massachusetts had failed to demonstrate that the
Maternity Act had caused it any particularized and
concrete burden, the Court held that the
Commonwealth had present[ed] no justiciable

App. 27a
controversy, either in its own behalf or as the
representative of its citizens. Id. at 480. The Court
concluded that Massachusetts challenge was
ultimately political, and not judicial in character, and
therefore [was] not a matter which admits of the
exercise of the judicial power. Id. at 483; see also New
Jersey v. Sargent, 269 U.S. 328, 337 (1926) (holding that
the States allegation that the congressional act at
issue that went beyond the power of Congress and
impinge[d] on that of the state . . . [did] not suffice as a
basis for invoking an exercise of judicial power).
Nearly one hundred years later, West Virginia
finds itself in precisely the same situation. West
Virginia admits that the Administrative Fix does not
require it to do or to yield anything. Mellon, 262 U.S.
at 482; Pl.s Oppn at 30-31 (The State has not claimed
harm[ ] from having to take any particular action.).
Rather, the Fix only presents the State with a simple
choice: either enforce the ACAs market requirements
or dontthe very same choice put to the states by the
ACA itself. But merely being put a choice does not give
rise to a legally cognizable injury. See Mellon, 262 U.S.
at 480, 482 (finding no justiciable controversy where
the statute did not require the states to do or to yield
anything); cf. FERC v. Mississippi, 456 U.S. 742,
765-66 (1982) (requiring a state merely to consider
federal proposals does not threaten the States
separate and independent existence and [does] not
impair the ability of the States to function effectively
in a federal system ) (citations omitted). West Virginia
wisely does not argue otherwise. Instead, it argues that

App. 28a
the consequences that flow from being put to such a
choice give rise to its injury-in-fact under the Tenth
Amendment. See Tr. 20 (The injury is that we are the
exclusive enforcer of federal law, and we are, therefore,
held accountable.).
But consequential harm in the form of increased
or enhanced political accountability is simply too
abstract to support standing. Such asserted injury
presents abstract questions of political power, of
sovereignty, of government of the kind that federal
courts are not permitted to adjudicate. Mellon, 262 U.S.
at 485; see also Valley Forge Christian Coll. v. Ams.
United for Separation of Church & State, Inc., 454 U.S.
464, 475 (1982) ([E]ven when the plaintiff has alleged
redressable injury sufficient to meet the requirements
of Art. III [standing], [courts] should refrain[ ] from
adjudicating abstract questions of wide public
significance which amount to generalized grievances.)
(internal citation omitted) (internal quotation marks
omitted). For instance, how would the court evaluate
whether, as West Virginia claims, the Administrative
Fix has resulted in lines of political accountability
[that] are far less certain? Compl. 71. Or, determine
whether the Administrative Fix has shift[ed] political
accountability away from the federal government to
the States? Id. 72. How would the court measure
whether, as a consequence of the Administrative Fix,
West Virginias citizens, in fact, hold the State, as
opposed to the federal government, responsible for the
non-enforcement of the ACAs market requirements?

App. 29a
These, and similar questions, would require the
court to adjudicate not rights of person or property,
not rights of dominion over physical domain, not quasi
sovereign rights actually invaded or threatened,
Mellon, 262 U.S. at 484-85, but instead would lead the
court into the area of speculation and conjecture, and
beyond the bounds of [its] jurisdiction, Whitmore
v.Arkansas, 495 U.S. 149, 158 (1990) (quoting OShea v.
Littleton, 414 U.S. 488, 497 (1974)); see also, c.f., Baker
v. Carr, 369 U.S. 186, 217 (1962) (establishing the
factors to be considered when determining
justiciability, including a lack of judicially
discoverable and manageable standards for resolving
[a claim], and the impossibility of deciding [a claim]
without an initial policy determination of a kind
clearly for nonjudicial discretion).
The problem of establishing injury-in-fact is
further compounded here because the State can, at
best, assert that that the Administrative Fix made it
marginally more politically accountable to its citizens;
it cannot claim that the Fix made it newly accountable
to them. After all, Congress gave the States a choice
whether to enforce the Acts market requirements. 42
U.S.C. 300gg-22(a)(1). The Administrative Fix did
nothing to alter that enforcement regime or political
reality. Indeed, West Virginia concedes that each State
has the same decision to make about enforcement that
it had before the Administrative Fix. Compl. 63(c).
What the Administrative Fix changed, according to
West Virginia, is the consequence of a states decision
not to enforce. Id.; Tr. 19. West Virginia argues that

App. 30a
[t]his re-writing of the ACA imbues the States
decisions with significantly greater practical and legal
consequence,
and
thereby
shifts
political
accountability to the States in violation of the Tenth
Amendment. Pl.s Mem. for Summ. J. at 33 (emphasis
added). But alleged injury in the form of newly levied
political accountability is itself too abstract to support
standing. And alleged injury of marginally increased
political accountability, as claimed here, is even more
attenuated.4
West Virginia argues that this case differs from
Mellon and like cases because those cases did not
involve[ ] the shifting of political accountability for
4

Even the limited record here demonstrates the

impossibility of determining whether the Administrative Fix
made West Virginia marginally more accountable to its citizens.
An article attached to West Virginias Complaint cites a state
health-policy expert, Brandon Merritt, as saying that the States
decision to allow non-compliant plans to be sold, per the
Administrative Fix, impacts a small segment of the states
population. Compl., Ex. 14, at 3. Merritt is quoted as further
opining: All in all, this makes me feel like this wont have a huge
impact on the way the ACA is implemented. It shouldnt impact
the implementation in West Virginia much, because we have one
of the smallest individual markets in the country. Id. (internal
quotation marks omitted). The Article estimated that roughly 55
percent of West Virginians receive their insurance from a large
employer or through state employment, and more than 30 percent
receive public insurance, such as Medicare or Medicare [sic]. Id.
There is no information about exactly how many citizens would
be affected by the Fix, id. at 2-3 (noting only that the Fix will
likely impact only a small portion of the population [in West
Virginia] or a small segment of the [ ] population), or if those
affected citizens hold the State accountable for the ACAs nonenforcement.

App. 31a
federal policies from the Federal Government to the
States, nor did the States in those cases assert any
violation of the anti-commandeering doctrine. Pl.s
Oppn at 28. But these attempts to distinguish Mellon
and related cases fail for two reasons. First, the fact
that Mellon and other cases do not expressly reject the
idea that shifting political accountability can support
standing does not mean that such asserted injury is a
legally cognizable injury under Lujan. After all, West
Virginia has not cited any case that recognizes its
novel standing theory and distinguishes Mellon from
the present factual context. Second, and more
importantly, the crux of Mellon is that abstract
injuries, even where advanced by a State, do not suffice
to support Article III standing. See 262 U.S. at 480
(observing that the effect of Article IIIs case or
controversy requirement is not to confer jurisdiction
upon the court merely because a state is a party, but
only where it is a party to a proceeding of judicial
cognizance). Thus, the fact that West Virginia here
advances an anti-commandeering Tenth Amendment
claim, but Mellon involved a Tenth Amendment
challenge to the federal governments exercise of its
spending power, is irrelevant. Concrete injury is an
indispensable requirement of a valid action regardless
of the nature of the challenge.
C. Political Accountability as Injury-inFact Under New York and Printz
To support its argument that enhanced political
accountability constitutes an injury-in-fact, West

App. 32a
Virginia relies primarily on two Tenth Amendment
anti-commandeering casesNew York v. United
States, 505 U.S. 144 (1992), and Printz v. United States,
521 U.S. 898 (1997). At issue in New York was the
federal
Low-Level
Radioactive Waste
Policy
Amendments Act of 1985. New York, 505 U.S. at
149-51. That Act provided States monetary and access
incentives to follow its terms, but if a State decided not
to do so, the Act compelled the State to take title to all
internally generated radioactive waste and made it
liable for all damages arising from the failure of the
State to take possession of such waste. Id. at 152-54.
The Supreme Court held that, although the monetary
and access provisions in question were constitutional,
the take title provision was not, because it put the
States to an unconstitutionally coercive choice: either
regulate as Congress directed or take title to the
waste. Id. at 171-77 (A choice between two
unconstitutionally coercive regulatory techniques is no
choice at all.). West Virginia argues that the Court
recognized in New York that placing heightened
political accountability on the States, without more,
could constitute a cognizable anti-commandeering injury,
Pl.s Oppn at 21-22, citing the following passage:
[W]here the Federal Government directs the
States to regulate, it may be state officials
who will bear the brunt of public disapproval,
while the federal officials who devised the
regulatory program may remain insulated
from the electoral ramifications of their
decision.
New York, 505 U.S. at 169.

App. 33a
Printz, the other case on which West Virginia
relies, involved a federal law requiring state and local
law enforcement officers to conduct background checks
and perform other tasks related to gun sales. The
Supreme Court held that under the Tenth Amendment
the federal government could neither compel a State,
nor conscript State officers, to administer or enforce a
federal regulatory program. Printz, 521 U.S. at 933-35.
It noted that [i]t is an essential attribute of the States
retained sovereignty that they remain independent
and autonomous within their proper sphere of
authority. It is no more compatible with this
independence and autonomy that their officers be
dragooned . . . into administering federal law. Id. at
928 (citation omitted). The Court answered the
governments contention that requiring the States to
perform discrete, ministerial acts did not violate the
Tenth Amendment by explainingin a passage cited
by West Virginia to support its standing theory, Pl.s
Oppn at 22that, even when the States are not
forced to absorb the costs of implementing a federal
program, they are still put in the position of taking the
blame for its burdensomeness and for its defects,
Printz, 521 U.S. at 930.
West Virginia is correct that both New York and
Printz recognize that the States may incur unfair and
disproportionate political consequences when the
federal government unlawfully commandeers the
States regulatory structures and personnel to enforce
federal standards. See New York, 505 U.S. at 168;

App. 34a
Printz, 521 U.S. at 921. But neither case holds that the
States suffer a legally cognizable injury-in-fact
whenever the federal government, without more,
presents them with a simple choice about whether to
enforce federal standards, and the only discernable
consequence of electing not to enforce is that the State
becomes politically accountable (or marginally more
accountable) to its citizens. Neither New York nor
Printz is a case about standing, and the Courts
observations about political accountability came
strictly within its discussions of the merits. The court
agrees with HHS that West Virginia cannot take an
abstract concept, elucidated as part of the Supreme
Courts merits reasoning, and bootstrap that
abstraction into a cognizable Article III injury. Def.s
Reply to Pl.s Oppn to Mot. to Dismiss, ECF No. 23, at
6 [hereinafter Def.s Reply].
But, more importantly, the passages in New York
and Printz on which West Virginia relies were written
in the context of analyzing federal statutes that
coerced or compelled the States to enforce federal
standardsa circumstance that West Virginia
concedes does not exist here.5 See New York, 505 U.S.
at 161-62, 175-77; Printz, 521 U.S. at 933-35; Tr. 10-15;
5

The court uses the phrase words compel and coerce here
as the Court used them in New York. There, the Court
distinguished statutes that unlawfully compel and coerce from
those that permissibly encourage a State to regulate in a
particular way. New York, 505 U.S. at 166 (Our cases have
identified a variety of methods, short of outright coercion, by
which Congress may urge a State to adopt a legislative program
consistent with federal interests.).

App. 35a
Pl.s Mem. for Summ J. at 34; see Pl.s Oppn at 7-8
(stating that the ACA gave the States a voluntary
choice to enforce the market requirements and
describing the Fix only as changing the consequence of
that choice, rather than the voluntary nature of the
choice). In New York, the Court explained that where
the Federal Government compels States to regulate,
the accountability of both state and federal officials is
diminished. 505 U.S. at 168 (emphasis added). Later
in the same paragraph, the Court again observed,
where the Federal Government directs the States to
regulate, it may be state officials who will bear the
brunt of public disapproval. Id. at 169 (emphasis
added). The Court noted that the statute in question
offers state governments a choice of either accepting
ownership of waste or regulating according to the
instructions of Congress. Id. at 175. In other words,
the statute offered States no real choice at all: No
matter which path the State chooses, it must follow the
direction of Congress. Id. at 177.
Similarly, the key passage in Printz cited by West
Virginia[E]ven when the States are not forced to
absorb the costs of implementing a federal program,
they are still put in the position of taking the blame,
521 U.S. at 930; see also Pl.s Oppn at 22came in
reference to a federal statute that, even by the federal
governments admission, require[ed] state officers to
perform discrete, ministerial tasks specified by
Congress, Printz, 521 U.S. at 929 (emphasis added).
Indeed, the court observed that the whole object of the
law [was] to direct the functioning of the state
executive, and hence to compromise the structural

App. 36a
framework of dual sovereignty. Id. at 932. In such a
scheme, the Court commented, it will be the [state
official] and not some federal official who stands
between the gun purchaser and immediate possession
of his gun. Id. at 930.
Fairly read, New York and Printz recognize that,
when a State suffers actual concrete injury from a
federal government actionsuch as through the
coerced expenditure of state revenues, the compelled
enforcement of federal standards, or the forced
acceptance of title to propertyincreased political
accountability for the State is a natural, albeit
derivative, outgrowth of such concrete injury. But
neither New York nor Printz can be reasonably read, as
West Virginia asserts, to mean that increased political
accountability is a stand-alone, cognizable legal injury
for purposes of Article III standing.
Other Supreme Court anti-commandeering cases,
although they do not speak of political accountability,
also implicitly recognize that no true commandeering
injury-in-fact exists absent compulsion or coercion by
the federal government. See, e.g., FERC, 456 U.S. at
765 (finding no Tenth Amendment violation where
there was nothing in the federal statute directly
compelling the States to enact a legislative program);
Hodel v. Va. Surface Mining & Reclamation Assn, Inc.,
452 U.S. 264, 288 (1981) (finding no Tenth Amendment
violation where the States are not compelled to
enforce the [federal] standards, to expend any state
funds, or to participate in the federal regulatory
program in any manner whatsoever); Charles C.

App. 37a
Steward Mach. Co. v. Davis, 301 U.S. 548, 589-90
(1937) (requiring coercion to establish an anticommandeering injury, i.e., the exertion of a power
akin to undue influence). Indeed, West Virginia has
cited no case, and the court has found none, in which
alleged injury to political accountability, unmoored
from allegations of federal compulsion or coercion, was
sufficient to confer standing upon a state. See Pl.s
Mem. for Summ. J. at 34 (arguing that HHS did not
require the States to enforce federal lawas the
Federal Government had done in New York and
Printz[but that] its novel effort to grant the States
unconditional and unguided discretion over federal
law is no less unconstitutional) (emphasis added); see
id. (admitting that the courts have not previously
encountered the type of situation at issue here).
As for the present Complaint, it nowhere alleges
that the Administrative Fix compelled or coerced West
Virginia to enforce the ACAs eight market
requirements. Admittedly, the Complaint does use the
word conscripted to describe the impact of HHS
actions on the State. See, e.g., Compl. 10(d) (By
making States solely responsible for determining
under federal law whether plans made illegal by the
ACA must be cancelled, the President has unlawfully
conscripted States into federal service[.]); see also id.
119 (citing Printzs use of the word conscript). But
at oral argument, West Virginia conceded that by
conscripted it meant little more than that the
Administrative Fix put the State to a choice: either
enforce the ACAs market requirements or elect not

App. 38a
to do so, knowing that without federal enforcement,
non-compliant plans could be sold legally within the
States borders. Tr. 10-11. As discussed, however,
simply offering the State a choice about regulation,
without any use of coercion, does not give rise to a
cognizable injury-in-fact for purposes of standing.
Elsewhere, West Virginia uses the word force in
its Complaint, alleging that the Administrative Fix
forces States to become federal policymakers. Compl.
64. But, when read in the context of the Complaint
as a whole, West Virginia uses the word force no
differently than it does the word conscriptthat is,
to mean that the State is asked to make a voluntary
choice whether or not to enforce the ACAs market
requirements, with the certain consequence that the
decision not to enforce will enable non-compliant plans
to be sold within the States borders.
D. Per Se Injury-in-Fact Under Lomont
Unable to root its asserted injury-in-fact in New
York and Printz, West Virginia tries a different tack. It
argues that a State always has standing to challenge
a federal statute or regulation that the State can
colorably claim violates its Tenth Amendment rights.
Pl.s Oppn at 22 (emphasis added). Stated differently,
West Virginia argues that inherent in any colorable
anti-commandeering claim brought by a State is a
legally cognizable injury resulting from federal action.
And, because a court must assume success on the
merits of such a claim at the motion to dismiss stage,

App. 39a
see LaRoque v. Holder, 650 F.3d 777, 785 (D.C. Cir.
2011) ([I]n assessing plaintiffs standing, we must
assume they will prevail on the merits of their
constitutional claims.), a State that asserts a colorable
anti-commandeering claim always has plead a
sufficient injury-in-fact.
To support its argument, West Virginia relies on
the Court of Appeals decision in Lomont v. ONeill,
285 F.3d 9 (D.C. Cir. 2002) [hereinafter Lomont II]. In
Lomont II, the plaintiffs were private individuals and
local law enforcement officials who challenged federal
regulations implementing the National Firearms Act
of 1934. 285 F.3d at 11-13. Under those regulations,
anyone who wished to transfer a firearm had to obtain
a certification from a local chief of police or county
sheriff or an appropriate federal official. Id. at 12. The
plaintiffs argued that the certification requirement
violated the Tenth Amendment under Printz because
it compelled States to administer the federal
regulatory regime. Lomont v. Summers, 135 F. Supp. 2d
23, 24 (D.D.C. 2001) [hereinafter Lomont I]. The Court
of Appeals ultimately rejected the plaintiffs claim on
the merits, concluding that, unlike the regulations in
Printz, the challenged regulations did not command
local and state officials to do anything; their
participation was entirely voluntary. Lomont II, 285
F.3d at 14.
But before reaching the merits, the Court of
Appeals ruled that the plaintiffs who were local
sheriffs had standing to raise their claims. Id. at 13.
The Court of Appeals rejected the governments

App. 40a
argument, raised in a footnote in its brief, that the
sheriffs had standing only if authorized by state law to
act on behalf of the State. Id. at 14-15. According to
West Virginia, because the Court of Appeals expressly
and easily found standing in Lomont II, yet ruled
against the plaintiffs on the merits, Lomont II requires
courts to afford special solicitude toward standing
[that is] based on harm to a States rights under the
Tenth Amendment. Pl.s Oppn. at 23. In other words,
West Virginia argues that Lomont II creates automatic
standing for States that assert colorable Tenth
Amendment claims.
West Virginia accords Lomont II far more weight
than it can bear. Nowhere does Lomont II say that a
State always has standing to challenge a federal
statute or regulation whenever it asserts a colorable
anti-commandeering claim. Pl.s Oppn at 22. Had the
Court of Appeals intended to announce such a
categorical rule, it presumably would have done so
explicitly. The better reading of Lomont II is a
narrower onenamely, that state law enforcement
officials have standing to challenge a federal law or
regulation whenever they assert that the law or
regulation at issue conscripts or impairs the state
officers official functions. See Arpaio v. Obama, 27
F. Supp. 3d 185, 201-02 (D.D.C. 2014) (interpreting
Lomont II as a case conferring standing to challenge
direct regulation of a state officers official duties),
aff d, Arpaio, 797 F.3d at 14-15. Such a reading is
consistent with the Court of Appeals citation to both
Printz and an earlier circuit decision, Fraternal Order

App. 41a
of Police v. United States, 173 F.3d 898, 904-05 (D.C.
Cir. 1999), each of which involved challenges by local
sheriffs to federal gun laws that allegedly directly
regulated their duties. This narrower reading of
Lomont II is also consistent with the cursory
treatment of standing in the governments appellate
brief, which is addressed only in a footnote. The
government did not seek to affirm the district courts
dismissal of the complaint on the alternative ground
that the law enforcement plaintiffs lacked standing.6
Thus, the Court of Appeals had no occasion to consider
the categorical standing rule that West Virginia
advocates.
Furthermore, Lomont II does not help West
Virginia because the law enforcement plaintiffs there
asserted that they were compel[led] to enact or
administer a federal regulatory program. Lomont I,
135 F. Supp. 2d at 24. The complaint in Lomont, which
this court has obtained and reviewed, alleged that the
challenged federal regulations require[d] local law
enforcement officials to complete transfer certificates,
6

This court has reviewed the appellate briefs in Lomont and

confirmed that the government there did not argue that the
district courts dismissal of the complaint could be affirmed on the
alternative ground that the plaintiffs lacked standing. All the
government did was assert its view, in a footnote, that the law
enforcement plaintiffs had standing only if they are authorized
by state law to act on behalf of the State, but acknowledged that
in Fraternal Order of Police, the Court of Appeals had held that a
law enforcement organization had standing to represent the
interests of its chief law enforcement members. See Br. for
Appellees at 34-35 n.9, Lomont v. ONeill, 285 F.3d 9 (D.C. Cir.
2002) (Civ. No. 01-05104).

App. 42a
which necessitated that local officials undertake a
variety of inquiries about the applicant, and thus
commandeer[ed] the resources of [the law
enforcement plaintiffs] and all other State and local
law enforcement officers so situated throughout the
United States. Lomont I, Civ. No. 00-01935 (JR),
Compl. 38-39, 42 (filed Aug. 10, 2000). West
Virginia, of course, makes no similar allegation of
compulsion here. It does not allege that the
Administrative Fix required it to expend any state
resources or its officials to take any particular action.
Thus, West Virginia has not alleged the kind of
concrete anti-commandeering injury that the Court of
Appeals in Lomont II found to confer standing.
Finally, West Virginias proposed categorical rule
that a State always has standing to challenge a
federal statute or regulation that the State can
colorably claim violates its Tenth Amendment rights
cannot be squared with Supreme Court precedent. Pl.s
Oppn at 22 (emphasis added). The Supreme Court has
explained that [n]o principle is more fundamental to
the judiciarys proper role in our system of government
than the constitutional limitation of federal-court
jurisdiction to actual cases or controversies. DaimlerChrysler Corp., 547 U.S. at 341 (citations omitted)
(internal quotation marks omitted). If a dispute is not
a proper case or controversy, the courts have no
business deciding it, or expounding the law in the
course of doing so. Id. The law of standing sits at the
center of the case-or-controversy requirement of
Article III, see Lujan, 504 U.S. at 341, and serves to

App. 43a
prevent the judicial process from being used to usurp
the powers of the political branches, Clapper v.
Amnesty Intl USA, 133 S. Ct. 1138, 1146 (2013).
By definition, Tenth Amendment challenges, such
as the one at issue here, seek to test the
constitutionality of an action taken by a coordinate
branch of the federal government, whether it be
legislation enacted by Congress or a regulation
promulgated by the Executive Branch. These claims
often involve controversial policy questions that courts
are ill-equipped to handle and that put the courts at
particular risk of encroaching on the proper domain of
the political branches; accordingly, such claims are
better left to the political branches to resolve. It is
therefore incumbent upon a federal court to ensure
that, before proceeding to the merits of a Tenth
Amendment challenge, a State asserting such a claim
has alleged a particularized, concrete, and otherwise
judicially cognizable injury. As the Court wrote in
Raines v. Byrd: [W]e must put aside the natural urge
to proceed directly to the merits . . . [and] [i]nstead, we
must carefully inquire as to whether appellees have met
their burden of establishing that their claimed injury is
personal, particularized, concrete, and otherwise
judicially cognizable. 521 U.S. 811, 820 (1997).
In view of the foregoing principles, the court
cannot conclude, as West Virginia has argued, that the
mere assertion of a colorable Tenth Amendment anticommandeering claim by a State is enough to establish
its Article III standing. Merely determining whether
an anti-commandeering claim is colorable falls well

App. 44a
short of the rigorous standing inquiry required by the
Supreme Court. Id. at 819. It is simply not enough for
a State to advance an anti-commandeering claim and
assert that injury is inherent within the claim. The
States burden is to establish a legally protected
interest under the Tenth Amendment that is concrete
and particularized and is not conjectural or
hypothetical. Lujan, 504 U.S. at 560 (citation omitted)
(internal quotation marks omitted). West Virginia has
failed to carry its burden in this case.
E. The
State
as
Object
Administrative Fix

of

the

Finally, West Virginia asserts that it has standing

because it is one of only 51 objects of the
Administrative Fix, Pl.s Oppn at 16 (citation
omitted), and that [w]hen a plaintiff is the object of
the [government] action (or forgone action) at issue,
there is generally little question that the action or
inaction has caused him injury, and that a judgment
preventing or requiring the action will redress it, id.
(citing Lujan, 504 U.S. at 561-62) (internal quotation
marks omitted). To demonstrate that the States were
the objects of the Administrative Fix, West Virginia
cites only the letter that HHS sent specifically and
only to state insurance commissioners, id., in which it
encouraged the States to adopt the same
transitional policy as HHS, Compl. 49 & Ex. 6 at 3.
In Lujan, the Court distinguished objects of a
government action or inaction, from those entities

App. 45a
whose claimed injury arises from the governments
allegedly unlawful regulation (or lack of regulation) of
someone else. Lujan, 504 U.S. at 562. As to the
formerthe objectsthe Court observed, there is
ordinarily little question that the action or inaction
has caused him injury, and that a judgment preventing
or requiring the action will redress it. Id. at 561-62.
By contrast, for a party that is not the object of the
challenged conduct, much more is needed . . . . [and]
causation and redressability ordinarily hinge on the
response of the regulated (or regulable) third party to
the government action or inaction. Id. at 562. Thus, as
HHS correctly observes, Lujans discussion about a
party as the object of a government action related to
the causation and redressability elements of standing,
and not injury-in-fact. See Def.s Reply at 17.
In any event, just because HHS notified the States
about the Administrative Fix and encouraged the
States to adopt it, it does not follow that the States
were the objects of the policy decision. The
Administrative Fix neither require[d] nor [forbade]
any action on the part of the States. Summers v. Earth
Island Inst., 555 U.S. 488, 493 (2009) (concluding that
the plaintiffs were not the objects of Forest Service
regulations that govern only the conduct of Forest
Service officials). Rather, the Administrative Fix
proscribed only HHS personnel from enforcing the
ACAs market requirements. See id. These officials
arguably are the objects of the Fix. And, if not them,
then the citizens whose non-compliant health
insurance policies were cancelled are the objects of

App. 46a
the Fix. The States, however, remain free to regulate if
they wish. See Compl. 63(c) ([E]ach State has the
same decision to make about enforcement that it had
before the Administrative Fix). The States simply
were not the objects of the Administrative Fix as the
Court used that term in Lujan.
V.

CONCLUSION

For the reasons stated above, the court grants

Defendants Motion to Dismiss. A separate order
accompanies this Memorandum Opinion.
Dated: October 30, 2015

/s/ Amit Mehta

Amit P. Mehta
United States
District Judge

App. 47a
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
State of West Virginia, )
)
Plaintiff,
)
v.
)
United States
)
Department of Health )
and Human Services,
)
)
Defendant.
)

Civil No.
1:14-cv-01287 (APM)

ORDER
(Filed Oct. 30, 2015)
For the reasons stated in the Memorandum
Opinion, ECF No. 35, the court grants Defendants
Motion to Dismiss, ECF No. 13, and dismisses this
matter in its entirety. It is further ordered that the
Motion for Leave to File Amicus Curiae Brief, ECF
No. 19, is granted.
The following motions are dismissed as moot:
1.

Plaintiff s Motion for Summary Judgment,

ECF No. 7;

2.

Plaintiff s Motion to Require a Response to

Plaintiff s Motion for Summary Judgment,
ECF No. 16; and

3.

Plaintiff s Motion to Vacate Stay of Summary

Judgement [sic] Briefing and to Compel the

App. 48a
Submission of the Administrative Record,
ECF No. 24.
This is a final, appealable order.
Dated: October 30, 2015

/s/ Amit Mehta

Amit P. Mehta
United States
District Judge

App. 49a
U.S. CONST. ART. II, 3
THE TAKE CARE CLAUSE
Section 3.
He [the President] shall from time to time give to
the Congress Information of the State of the Union,
and recommend to their Consideration such Measures
as he shall judge necessary and expedient; he may, on
extraordinary Occasions, convene both Houses, or
either of them, and in Case of Disagreement between
them, with Respect to the Time of Adjournment, he
may adjourn them to such Time as he shall think
proper; he shall receive Ambassadors and other public
Ministers; he shall take Care that the Laws be
faithfully executed, and shall Commission all the
Officers of the United States.

U.S. CONST. ART. III, 2, CL. 1

THE JUDICIAL POWER
Section 2, Clause 1.
The judicial Power shall extend to all Cases, in
Law and Equity, arising under this Constitution, the
Laws of the United States, and Treaties made, or which
shall be made, under their Authority;to all Cases
affecting Ambassadors, other public Ministers and
Consuls;to all Cases of admiralty and maritime
Jurisdiction;to Controversies to which the United
States shall be a Party;to Controversies between two
or more States;between a State and Citizens of
another State;between Citizens of different

App. 50a
States;between Citizens of the same State claiming
Lands under Grants of different States, and between a
State, or the Citizens thereof, and foreign States,
Citizens or Subjects.

App. 51a
42 U.S.C. 300gg
THE ACAS MARKET REQUIREMENT
FOR VARIATIONS IN POLICY PREMIUMS
Section 300gg.

Fair health insurance premiums

(a)1 Prohibiting discriminatory premium rates

(1)

In general

With respect to the premium rate charged by a

health insurance issuer for health insurance coverage
offered in the individual or small group market
(A) such rate shall vary with respect to the
particular plan or coverage involved only by
(i) whether such plan or coverage covers an
individual or family;
(ii) rating area, as established in accordance
with paragraph (2);
(iii) age, except that such rate shall not vary
by more than 3 to 1 for adults (consistent with
section 300gg-6(c) of this title); and
(iv) tobacco use, except that such rate shall
not vary by more than 1.5 to 1; and
(B) such rate shall not vary with respect to the
particular plan or coverage involved by any other
factor not described in subparagraph (A).

So in original. No subsec. (b) enacted.

App. 52a
(2)

Rating area
(A)

In general
Each State shall establish 1 or more
rating areas within that State for purposes of
applying the requirements of this title.

(B)

Secretarial review
The Secretary shall review the rating
areas established by each State under
subparagraph (A) to ensure the adequacy of
such areas for purposes of carrying out the
requirements of this title. If the Secretary
determines a States rating areas are not
adequate, or that a State does not establish
such areas, the Secretary may establish
rating areas for that State.

(3)

Permissible age bands

The Secretary, in consultation with the National

Association of Insurance Commissioners, shall define
the permissible age bands for rating purposes under
paragraph (1)(A)(iii).
(4) Application of variations based on age or tobacco
use
With respect to family coverage under a group
health plan or health insurance coverage, the rating
variations permitted under clauses (iii) and (iv) of
paragraph (1)(A) shall be applied based on the portion
of the premium that is attributable to each family
member covered under the plan or coverage.

App. 53a
(5)

Special rule for large group market

If a State permits health insurance issuers that

offer coverage in the large group market in the State
to offer such coverage through the State Exchange (as
provided for under section 18033(f )(2)(B) of this title),
the provisions of this subsection shall apply to all
coverage offered in such market (other than selfinsured group health plans offered in such market) in
the State.

42 U.S.C. 300gg-1
THE ACAS MARKET MANDATE TO
ACCEPT ALL APPLICATIONS TO
JOIN A HEALTH INSURANCE PLAN
Section 300gg-1. Guaranteed availability of coverage
(a) Guaranteed issuance of coverage in the
individual and group market
Subject to subsections (b) through (e),2 each health
insurance issuer that offers health insurance coverage
in the individual or group market in a State must
accept every employer and individual in the State that
applies for such coverage.

So in original.

App. 54a
(b)

Enrollment
(1)

Restriction

A health insurance issuer described in

subsection (a) may restrict enrollment in coverage
described in such subsection to open or special
enrollment periods.
(2)

Establishment

A health insurance issuer described in

subsection (a) shall, in accordance with the
regulations promulgated under paragraph (3),
establish special enrollment periods for qualifying
events (under section 1163 of Title 29).
(3)

Regulations

The Secretary shall promulgate regulations

with respect to enrollment periods under
paragraphs (1) and (2).
(c) Special rules for network plans
(1)

In general

In the case of a health insurance issuer that

offers health insurance coverage in the group and
individual market through a network plan, the
issuer may
(A) limit the employers that may apply for
such coverage to those with eligible
individuals who live, work, or reside in the
service area for such network plan; and
(B) within the service area of such plan,
deny such coverage to such employers and
individuals if the issuer has demonstrated, if

App. 55a
required, to the applicable State authority
that
(i) it will not have the capacity to deliver
services adequately to enrollees of any
additional groups or any additional
individuals because of its obligations to
existing group contract holders and
enrollees, and
(ii) it is applying this paragraph
uniformly to all employers and
individuals without regard to the claims
experience
of
those
individuals,
employers and their employees (and their
dependents) or any health status-related
factor relating to such individuals1 [sic]
employees and dependents.
(2)

180-day suspension upon denial of coverage

An issuer, upon denying health insurance

coverage in any service area in accordance with
paragraph (1)(B), may not offer coverage in the
group or individual market within such service
area for a period of 180 days after the date such
coverage is denied.
(d) Application of financial capacity limits
(1)

In general

A health insurance issuer may deny health

insurance coverage in the group or individual
market if the issuer has demonstrated, if required,
to the applicable State authority that

App. 56a
(A) it does not have the financial reserves
necessary to underwrite additional coverage;
and
(B) it is applying this paragraph uniformly
to all employers and individuals in the group
or individual market in the State consistent
with applicable State law and without regard
to the claims experience of those individuals,
employers and their employees (and their
dependents) or any health status-related
factor relating to such individuals, employees
and dependents.
(2)

180-day suspension upon denial of coverage

A health insurance issuer upon denying

health insurance coverage in connection with
group health plans in accordance with paragraph
(1) in a State may not offer coverage in connection
with group health plans in the group or individual
market in the State for a period of 180 days after
the date such coverage is denied or until the issuer
has demonstrated to the applicable State
authority, if required under applicable State law,
that the issuer has sufficient financial reserves to
underwrite additional coverage, whichever is
later. An applicable State authority may provide
for the application of this subsection on a servicearea-specific basis.

App. 57a
42 U.S.C. 300gg-2
THE ACAS MARKET MANDATE TO
ACCEPT ALL APPLICATIONS TO
RENEW A HEALTH INSURANCE PLAN
Section 300gg-2. Guaranteed renewability of coverage
(a) In general
Except as provided in this section, if a health
insurance issuer offers health insurance coverage in
the individual or group market, the issuer must renew
or continue in force such coverage at the option of the
plan sponsor or the individual, as applicable.
(b)

General exceptions

A health insurance issuer may nonrenew or

discontinue health insurance coverage offered in
connection with a health insurance coverage offered in
the group or individual market based only on one or
more of the following:
(1) Nonpayment of premiums
The plan sponsor, or individual, as applicable,
has failed to pay premiums or contributions in
accordance with the terms of the health insurance
coverage or the issuer has not received timely
premium payments.
(2)

Fraud

The plan sponsor, or individual, as applicable,

has performed an act or practice that constitutes
fraud or made an intentional misrepresentation of
material fact under the terms of the coverage.

App. 58a
(3) Violation of participation or contribution rates
In the case of a group health plan, the plan
sponsor has failed to comply with a material plan
provision relating to employer contribution or
group participation rules, pursuant to applicable
State law.
(4)

Termination of coverage

The issuer is ceasing to offer coverage in such

market in accordance with subsection (c) of this
section and applicable State law.
(5) Movement outside service area
In the case of a health insurance issuer that
offers health insurance coverage in the market
through a network plan, there is no longer any
enrollee in connection with such plan who lives,
resides, or works in the service area of the issuer
(or in the area for which the issuer is authorized
to do business) and, in the case of the small group
market, the issuer would deny enrollment with
respect to such plan under section 2711(c)(1)(A).
(6) Association membership ceases
In the case of health insurance coverage that
is made available in the small or large group
market (as the case may be) only through one or
more bona fide associations, the membership of an
employer in the association (on the basis of which
the coverage is provided) ceases but only if such
coverage is terminated under this paragraph
uniformly without regard to any health statusrelated factor relating to any covered individual.

App. 59a
(c) Requirements for uniform termination of
coverage
(1)

Particular type of coverage not offered

In any case in which an issuer decides to

discontinue offering a particular type of group or
individual health insurance coverage, coverage of
such type may be discontinued by the issuer in
accordance with applicable State law in such
market only if
(A) the issuer provides notice to each plan
sponsor or individual, as applicable, provided
coverage of this type in such market (and
participants and beneficiaries covered under
such coverage) of such discontinuation at
least 90 days prior to the date of the
discontinuation of such coverage;
(B) the issuer offers to each plan sponsor or
individual, as applicable, provided coverage of
this type in such market, the option to
purchase all (or, in the case of the large group
market, any) other health insurance coverage
currently being offered by the issuer to a
group health plan in such market; and
(C) in exercising the option to discontinue
coverage of this type and in offering the option
of coverage under subparagraph (B), the
issuer acts uniformly without regard to the
claims experience of those sponsors or
individuals, as applicable, or any health
status-related factor relating to any
participants or beneficiaries covered or new

App. 60a
participants or beneficiaries who may become
eligible for such coverage.
(2)

Discontinuance of all coverage

(A)

In general

In any case in which a health insurance

issuer elects to discontinue offering all health
insurance coverage in the individual or group
market, or all markets, in a State, health
insurance coverage may be discontinued by
the issuer only in accordance with applicable
State law and if
(i) the issuer provides notice to the
applicable State authority and to each
plan sponsor or individual, as applicable,3
(and participants and beneficiaries
covered under such coverage) of such
discontinuation at least 180 days prior to
the date of the discontinuation of such
coverage; and
(ii) all health insurance issued or
delivered for issuance in the State in such
market (or markets) are discontinued
and coverage under such health
insurance coverage in such market (or
markets) is not renewed.
(B)

Prohibition on market reentry

In the case of a discontinuation under subparagraph (A) in a market, the issuer may not
provide for the issuance of any health insurance
3

So in original.

App. 61a
coverage in the market and State involved during
the 5-year period beginning on the date of the
discontinuation of the last health insurance
coverage not so renewed.
(d) Exception
coverage

for

uniform

modification

of

At the time of coverage renewal, a health

insurance issuer may modify the health insurance
coverage for a product offered to a group health plan
(1) in the large group market; or
(2) in the small group market if, for coverage
that is available in such market other than only
through one or more bona fide associations, such
modification is consistent with State law and
effective on a uniform basis among group health
plans with that product.
(e) Application to coverage offered only through
associations
In applying this section in the case of health
insurance coverage that is made available by a health
insurance issuer in the small or large group market
to employers only through one or more associations, a
reference to plan sponsor is deemed, with respect to
coverage provided to an employer member of the
association, to include a reference to such employer.

App. 62a
42 U.S.C. 300gg-3
THE ACAS MARKET REQUIREMENT
OF NON-DISCRIMINATION AGAINST
PRE-EXISTING HEALTH CONDITIONS
Section 300gg-3. Prohibition of preexisting condition
exclusions or other discrimination based on health
status
(a) In general
A group health plan and a health insurance issuer
offering group or individual health insurance coverage
may not impose any preexisting condition exclusion
with respect to such plan or coverage.
(b) Definitions
For purposes of this part
(1)

Preexisting condition exclusion

(A)

In general

The
term
preexisting
condition
exclusion means, with respect to coverage, a
limitation or exclusion of benefits relating to
a condition based on the fact that the
condition was present before the date of
enrollment for such coverage, whether or not
any medical advice, diagnosis, care, or
treatment was recommended or received
before such date.
(B)

Treatment of genetic information

Genetic information shall not be treated

as a condition described in subsection (a)(1) of

App. 63a
this section in the absence of a diagnosis of the
condition related to such information.
(2) Enrollment date
The term enrollment date means, with
respect to an individual covered under a group
health plan or health insurance coverage, the date
of enrollment of the individual in the plan or
coverage or, if earlier, the first day of the waiting
period for such enrollment.
(3)

Late enrollee

The term late enrollee means, with respect

to coverage under a group health plan, a
participant or beneficiary who enrolls under the
plan other than during
(A) the first period in which the individual is
eligible to enroll under the plan, or
(B) a special enrollment
subsection (f ) of this section.
(4)

period

under

Waiting period

The term waiting period means, with respect

to a group health plan and an individual who is a
potential participant or beneficiary in the plan,
the period that must pass with respect to the
individual before the individual is eligible to be
covered for benefits under the terms of the plan.

App. 64a
(c) Rules relating
coverage
(1)

to

crediting

previous

Creditable coverage defined

For purposes of this subchapter, the term

creditable coverage means, with respect to an
individual, coverage of the individual under any of
the following:
(A)

A group health plan.

(B)

Health insurance coverage.

(C) Part A or part B of title XVIII of the

Social Security Act [42 U.S.C.A. 1395c et seq.
or 1395j et seq.].
(D) Title XIX of the Social Security Act [42
U.S.C.A. 1396 et seq.], other than coverage
consisting solely of benefits under section
1928 [42 U.S.C.A. 1396s].
(E) Chapter 55 of Title 10.
(F) A medical care program of the Indian
Health Service or of a tribal organization.
(G)

A State health benefits risk pool.

(H) A health plan offered under chapter 89

of Title 5.
(I) A public health plan (as defined in
regulations).
(J) A health benefit plan under section
2504(e) of Title 22.

App. 65a
Such term does not include coverage consisting
solely of coverage of excepted benefits (as defined
in section 300gg-91(c) of this title).
(2) Not counting periods before significant breaks
in coverage
(A) In general
A period of creditable coverage shall not
be counted, with respect to enrollment of an
individual under a group or individual health
plan, if, after such period and before the
enrollment date, there was a 63-day period
during all of which the individual was not
covered under any creditable coverage.
(B) Waiting period not treated as a break in
coverage
For purposes of subparagraph (A) and
subsection (d)(4) of this section, any period
that an individual is in a waiting period for
any coverage under a group or individual
health plan (or for group health insurance
coverage) or is in an affiliation period (as
defined in subsection (g)(2) of this section)
shall not be taken into account in determining
the continuous period under subparagraph
(A).
(C)

TAA-eligible individuals

In the case of plan years beginning before

January 1, 2014

App. 66a
(i)

TAA pre-certification period rule

In the case of a TAA-eligible

individual, the period beginning on the
date the individual has a TAA-related
loss of coverage and ending on the date
that is 7 days after the date of the
issuance by the Secretary (or by any
person or entity designated by the
Secretary) of a qualified health insurance
costs credit eligibility certificate for such
individual for purposes of section 7527 of
Title 26 shall not be taken into account in
determining the continuous period under
subparagraph (A).
(ii)

Definitions

The terms TAA-eligible individual

and TAA-related loss of coverage have
the meanings given such terms in section
300bb-5(b)(4) of this title.
(3)

Method of crediting coverage

(A)

Standard method

Except as otherwise provided under

subparagraph (B), for purposes of applying
subsection (a)(3) of this section, a group
health plan, and a health insurance issuer
offering group or individual health insurance
coverage, shall count a period of creditable
coverage without regard to the specific
benefits covered during the period.

App. 67a
(B)

Election of alternative method

A group health plan, or a health

insurance issuer offering group or individual
health insurance, may elect to apply
subsection (a)(3) of this section based on
coverage of benefits within each of several
classes or categories of benefits specified in
regulations rather than as provided under
subparagraph (A). Such election shall be
made on a uniform basis for all participants
and beneficiaries. Under such election a group
health plan or issuer shall count a period of
creditable coverage with respect to any class
or category of benefits if any level of benefits
is covered within such class or category.
(C)

Plan notice

In the case of an election with respect to

a group health plan under subparagraph (B)
(whether or not health insurance coverage is
provided in connection with such plan), the
plan shall
(i) prominently state in any disclosure
statements concerning the plan, and
state to each enrollee at the time of
enrollment under the plan, that the plan
has made such election, and
(ii) include in such statements a
description of the effect of this election.
(D)

Issuer notice

In the case of an election under subparagraph

(B) with respect to health insurance coverage

App. 68a
offered by an issuer in the individual or group
group4 market, the issuer
(i) shall prominently state in any disclosure
statements concerning the coverage, and to
each employer at the time of the offer or sale
of the coverage, that the issuer has made such
election, and
(ii) shall include in such statements a
description of the effect of such election.
(4)

Establishment of period

Periods of creditable coverage with respect to

an individual shall be established through
presentation of certifications described in
subsection (e) of this section or in such other
manner as may be specified in regulations.
(d)

Exceptions
(1)

Exclusion not applicable to certain newborns

Subject to paragraph (4), a group health plan,

and a health insurance issuer offering group or
individual health insurance coverage, may not
impose any preexisting condition exclusion in the
case of an individual who, as of the last day of the
30-day period beginning with the date of birth, is
covered under creditable coverage.
(2) Exclusion not applicable to certain adopted
children
Subject to paragraph (4), a group health plan,
and a health insurance issuer offering group or
4

So in original.

App. 69a
individual health insurance coverage, may not
impose any preexisting condition exclusion in the
case of a child who is adopted or placed for
adoption before attaining 18 years of age and who,
as of the last day of the 30-day period beginning
on the date of the adoption or placement for
adoption, is covered under creditable coverage.
The previous sentence shall not apply to coverage
before the date of such adoption or placement for
adoption.
(3)

Exclusion not applicable to pregnancy

A group health plan, and health

insurance issuer offering group or individual
health insurance coverage, may not impose any
preexisting condition exclusion relating to
pregnancy as a preexisting condition.
(4) Loss if break in coverage
Paragraphs (1) and (2) shall no longer apply
to an individual after the end of the first 63-day
period during all of which the individual was not
covered under any creditable coverage.
(e)

Certifications and disclosure of coverage

(1) Requirement for certification of period of
creditable coverage
(A)

In general

A group health plan, and a health

insurance issuer offering group or individual
health insurance coverage, shall provide the
certification described in subparagraph (B)

App. 70a
(i) at the time an individual ceases to be
covered under the plan or otherwise
becomes covered under a COBRA
continuation provision,
(ii) in the case of an individual
becoming covered under such a provision,
at the time the individual ceases to be
covered under such provision, and
(iii) on the request on behalf of an
individual made not later than 24 months
after the date of cessation of the coverage
described in clause (i) or (ii), whichever is
later.
The certification under clause (i) may be
provided, to the extent practicable, at a time
consistent with notices required under any
applicable COBRA continuation provision.
(B)

Certification

The certification described in this

subparagraph is a written certification of
(i) the period of creditable coverage of
the individual under such plan and the
coverage (if any) under such COBRA
continuation provision, and
(ii) the waiting period (if any) (and
affiliation period, if applicable) imposed
with respect to the individual for any
coverage under such plan.

App. 71a
(C)

Issuer compliance

To the extent that medical care under a group

health plan consists of group health insurance
coverage, the plan is deemed to have satisfied the
certification requirement under this paragraph if
the health insurance issuer offering the coverage
provides for such certification in accordance with
this paragraph.
(2)

Disclosure of information on previous benefits

In the case of an election described in

subsection (c)(3)(B) of this section by a group
health plan or health insurance issuer, if the plan
or issuer enrolls an individual for coverage under
the plan and the individual provides a certification
of coverage of the individual under paragraph
(1)
(A) upon request of such plan or issuer, the
entity which issued the certification provided
by the individual shall promptly disclose to
such requesting plan or issuer information on
coverage of classes and categories of health
benefits available under such entitys plan or
coverage, and
(B) such entity may charge the requesting
plan or issuer for the reasonable cost of
disclosing such information.
(3)

Regulations

The Secretary shall establish rules to prevent

an entitys failure to provide information under
paragraph (1) or (2) with respect to previous
coverage of an individual from adversely affecting

App. 72a
any subsequent coverage of the individual under
another group health plan or health insurance
coverage.
(f )

Special enrollment periods

(1)

Individuals losing other coverage

A group health plan, and a health insurance

issuer offering group health insurance coverage in
connection with a group health plan, shall permit
an employee who is eligible, but not enrolled, for
coverage under the terms of the plan (or a
dependent of such an employee if the dependent is
eligible, but not enrolled, for coverage under such
terms) to enroll for coverage under the terms of
the plan if each of the following conditions is met:
(A) The employee or dependent was covered
under a group health plan or had health
insurance coverage at the time coverage was
previously offered to the employee or
dependent.
(B) The employee stated in writing at such
time that coverage under a group health plan
or health insurance coverage was the reason
for declining enrollment, but only if the plan
sponsor or issuer (if applicable) required such
a statement at such time and provided the
employee with notice of such requirement
(and the consequences of such requirement)
at such time.
(C) The employees or dependents coverage
described in subparagraph (A)

App. 73a
(i) was under a COBRA continuation
provision and the coverage under such
provision was exhausted; or
(ii) was not under such a provision and
either the coverage was terminated as
a result of loss of eligibility for the
coverage (including as a result of legal
separation, divorce, death, termination of
employment, or reduction in the number
of hours of employment) or employer
contributions toward such coverage were
terminated.
(D) Under the terms of the plan, the
employee requests such enrollment not later
than 30 days after the date of exhaustion
of coverage described in subparagraph (C)(i)
or termination of coverage or employer
contribution described in subparagraph
(C)(ii).
(2) For dependent beneficiaries
(A)

In general
If
(i) a group health plan makes coverage
available with respect to a dependent of
an individual,
(ii) the individual is a participant under
the plan (or has met any waiting period
applicable to becoming a participant
under the plan and is eligible to be
enrolled under the plan but for a failure

App. 74a
to enroll during a previous enrollment
period), and
(iii) a person becomes such a dependent
of the individual through marriage, birth,
or adoption or placement for adoption,
the group health plan shall provide for a dependent
special enrollment period described in subparagraph
(B) during which the person (or, if not otherwise
enrolled, the individual) may be enrolled under the
plan as a dependent of the individual, and in the case
of the birth or adoption of a child, the spouse of the
individual may be enrolled as a dependent of the
individual if such spouse is otherwise eligible for
coverage.
(B)

Dependent special enrollment period

A dependent special enrollment period

under this subparagraph shall be a period of
not less than 30 days and shall begin on the
later of
(i) the date dependent coverage is made
available, or
(ii) the date of the marriage, birth, or
adoption or placement for adoption (as
the case may be) described in
subparagraph (A)(iii).
(C)

No waiting period

If an individual seeks to enroll a

dependent during the first 30 days of such a
dependent special enrollment period, the

App. 75a
coverage of the dependent shall become
effective
(i) in the case of marriage, not later than
the first day of the first month beginning
after the date the completed request for
enrollment is received;
(ii) in the case of a dependents birth, as
of the date of such birth; or
(iii) in the case of a dependents
adoption or placement for adoption, the
date of such adoption or placement for
adoption.
(3) Special rules for application in case of
Medicaid and CHIP
(A)

In general

A group health plan, and a health

insurance issuer offering group health
insurance coverage in connection with a group
health plan, shall permit an employee who is
eligible, but not enrolled, for coverage under
the terms of the plan (or a dependent of such
an employee if the dependent is eligible, but
not enrolled, for coverage under such terms)
to enroll for coverage under the terms of the
plan if either of the following conditions is
met:
(i)

Termination of Medicaid or CHIP

coverage

The employee or dependent is

covered under a Medicaid plan under
Title XIX of the Social Security Act [42

App. 76a
U.S.C.A. 1396 et seq.] or under a State
child health plan under Title XXI of such
Act [42 U.S.C.A. 1397aa et seq.] and
coverage of the employee or dependent
under such a plan is terminated as a
result of loss of eligibility for such
coverage and the employee requests
coverage under the group health plan (or
health insurance coverage) not later than
60 days after the date of termination of
such coverage.
(ii) Eligibility for employment assistance
under Medicaid or CHIP
The employee or dependent becomes
eligible for assistance, with respect to
coverage under the group health plan or
health insurance coverage, under such
Medicaid plan or State child health plan
(including under any waiver or
demonstration project conducted under
or in relation to such a plan), if the
employee requests coverage under the
group health plan or health insurance
coverage not later than 60 days after the
date the employee or dependent is
determined to be eligible for such
assistance.

App. 77a
(B)

Coordination with Medicaid and CHIP

(i)

Outreach to employees regarding

availability of Medicaid and CHIP
coverage
(I) In general
Each employer that maintains a
group health plan in a State that
provides medical assistance under a
State Medicaid plan under Title XIX
of the Social Security Act [42 U.S.C.A
1396 et seq.], or child health
assistance under a State child health
plan under Title XXI of such Act [42
U.S.C.A 1397aa et seq.], in the form
of premium assistance for the
purchase of coverage under a group
health plan, shall provide to
each employee a written notice
informing the employee of potential
opportunities
then
currently
available in the State in which the
employee resides for premium
assistance under such plans for
health coverage of the employee or
the employees dependents. For
purposes of compliance with this
subclause, the employer may use
any State-specific model notice
developed in accordance with section
1181(f )(3)(B)(i)(II) of Title 29.

App. 78a
(II) Option to provide concurrent
with provision of plan materials
to employee
An employer may provide the
model notice applicable to the State
in which an employee resides
concurrent with the furnishing of
materials notifying the employee of
health plan eligibility, concurrent
with materials provided to the
employee in connection with an open
season or election process conducted
under the plan, or concurrent with
the furnishing of the summary plan
description as provided in section
1024(b) of Title 29.
(ii) Disclosure about group health plan
benefits to States for Medicaid and
CHIP eligible individuals
In the case of an enrollee in a group
health plan who is covered under a
Medicaid plan of a State under Title XIX
of the Social Security Act [42 U.S.C.A
1396 et seq.] or under a State child health
plan under Title XXI of such Act [42
U.S.C.A 1397aa et seq.], the plan
administrator of the group health plan
shall disclose to the State, upon request,
information about the benefits available
under the group health plan in sufficient
specificity,
as
determined
under
regulations of the Secretary of Health
and Human Services in consultation

App. 79a
with the Secretary that require use of
the
model
coverage
coordination
disclosure form developed under section
311(b)(1)(C) of the Childrens Health
Insurance5 Reauthorization Act of 2009,
so as to permit the State to make a
determination (under paragraph (2)(B),
(3), or (10) of section 2105(c) of the Social
Security Act [42 U.S.C.A 1397ee(c)(2)(B),
(3), (10)] or otherwise) concerning the
cost-effectiveness of the State providing
medical or child health assistance
through premium assistance for the
purchase of coverage under such group
health plan and in order for the State to
provide supplemental benefits required
under paragraph (10)(E) of such section
or other authority.
(g) Use of affiliation period by HMOs as
alternative
to
preexisting
condition
exclusion
(1)

In general

A health maintenance organization which

offers health insurance coverage in connection
with a group health plan and which does not
impose any preexisting condition exclusion
allowed under subsection (a) of this section with
respect to any particular coverage option may
impose an affiliation period for such coverage
option, but only if
5

So in original. Probably should be followed by the word

Program [sic].

App. 80a
(A) such period is applied uniformly without
regard to any health status-related factors;
and
(B) such period does not exceed 2 months (or
3 months in the case of a late enrollee).
(2)

Affiliation period
(A)

Affiliation period defined

For purposes of this subchapter, the term

affiliation period means a period which,
under the terms of the health insurance
coverage offered by the health maintenance
organization, must expire before the health
insurance coverage becomes effective. The
organization is not required to provide health
care services or benefits during such period
and no premium shall be charged to the
participant or beneficiary for any coverage
during the period.
(B)

Beginning

Such period shall begin on the enrollment

date.
(C)

Runs concurrently with waiting periods

An affiliation period under a plan shall

run concurrently with any waiting period
under the plan.
(3)

Alternative methods

A health maintenance organization described

in paragraph (1) may use alternative methods,
from those described in such paragraph, to

App. 81a
address adverse selection as approved by the State
insurance commissioner or official or officials
designated by the State to enforce the
requirements of this part for the State involved
with respect to such issuer.

42 U.S.C. 300gg-4
THE ACAS MARKET REQUIREMENT
OF NON-DISCRIMINATION ON THE
BASIS OF HEALTH HISTORY
Section 300gg-4. Prohibiting discrimination against
individual participants and beneficiaries based on
health status
(a) In general
A group health plan and a health insurance issuer
offering group or individual health insurance coverage
may not establish rules for eligibility (including
continued eligibility) of any individual to enroll under
the terms of the plan or coverage based on any of the
following health status-related factors in relation to
the individual or a dependent of the individual:
(1)

Health status.

(2) Medical condition (including both physical

and mental illnesses).
(3)

Claims experience.

(4)

Receipt of health care.

(5)

Medical history.

App. 82a
(6)

Genetic information.

(7) Evidence of insurability (including conditions

arising out of acts of domestic violence).
(8)

Disability.

(9) Any other health status-related

determined appropriate by the Secretary.
(b)

factor

In premium contributions
(1)

In general

A group health plan, and a health insurance

issuer offering group or individual health
insurance coverage, may not require any
individual (as a condition of enrollment or
continued enrollment under the plan) to pay a
premium or contribution which is greater than
such premium or contribution for a similarly
situated individual enrolled in the plan on the
basis of any health status-related factor in
relation to the individual or to an individual
enrolled under the plan as a dependent of the
individual.
(2)

Construction
Nothing in paragraph (1) shall be construed
(A) to restrict the amount that an employer
or individual may be charged for coverage
under a group health plan except as provided
in paragraph (3) or individual health
coverage, as the case may be; or
(B) to prevent a group health plan, and a
health insurance issuer offering group health

App. 83a
insurance coverage, from establishing
premium discounts or rebates or modifying
otherwise
applicable
copayments
or
deductibles in return for adherence to
programs of health promotion and disease
prevention.
(3) No group-based discrimination on basis of
genetic information
(A)

In general

For purposes of this section, a group

health plan, and health6 insurance issuer
offering group health insurance coverage in
connection with a group health plan, may not
adjust premium or contribution amounts for
the group covered under such plan on the
basis of genetic information.
(B)

Rule of construction

Nothing in subparagraph (A) or in

paragraphs (1) and (2) of subsection (d) shall
be construed to limit the ability of a health
insurance issuer offering group or individual
health insurance coverage to increase the
premium for an employer based on the
manifestation of a disease or disorder of an
individual who is enrolled in the plan. In such
case, the manifestation of a disease or
disorder in one individual cannot also be used
as genetic information about other group
members and to further increase the
premium for the employer.
6

So in original. Probably should be preceded by a[sic].

App. 84a
(c) Genetic testing
(1) Limitation on requesting or requiring genetic
testing
A group health plan, and a health insurance
issuer offering health insurance coverage in
connection with a group health plan, shall not
request or require an individual or a family
member of such individual to undergo a genetic
test.
(2)

Rule of construction

Paragraph (1) shall not be construed to limit

the authority of a health care professional who is
providing health care services to an individual to
request that such individual undergo a genetic
test.
(3) Rule of construction regarding payment
(A)

In general

Nothing in paragraph (1) shall be

construed to preclude a group health plan, or
a health insurance issuer offering health
insurance coverage in connection with a group
health plan, from obtaining and using the
results of a genetic test in making a
determination regarding payment (as such
term is defined for the purposes of applying
the regulations promulgated by the Secretary
under part C of title XI of the Social Security
Act and section 264 of the Health Insurance
Portability and Accountability Act of 1996, as
may be revised from time to time) consistent
with subsection (a).

App. 85a
(B)

Limitation

For purposes of subparagraph (A), a

group health plan, or a health insurance
issuer offering health insurance coverage in
connection with a group health plan, may
request only the minimum amount of
information necessary to accomplish the
intended purpose.
(4)

Research exception

Notwithstanding paragraph (1), a group

health plan, or a health insurance issuer offering
health insurance coverage in connection with a
group health plan, may request, but not require,
that a participant or beneficiary undergo a genetic
test if each of the following conditions is met:
(A) The request is made pursuant to
research that complies with part 46 of title 45,
Code of Federal Regulations, or equivalent
Federal regulations, and any applicable State
or local law or regulations for the protection of
human subjects in research.
(B) The plan or issuer clearly indicates to
each participant or beneficiary, or in the case
of a minor child, to the legal guardian of such
beneficiary, to whom the request is made
that
(i) compliance
voluntary; and

with

the

request

is

(ii) non-compliance will have no effect

on enrollment status or premium or
contribution amounts.

App. 86a
(C) No genetic information collected or
acquired under this paragraph shall be used
for underwriting purposes.
(D) The plan or issuer notifies the Secretary
in writing that the plan or issuer is
conducting activities pursuant to the
exception provided for under this paragraph,
including a description of the activities
conducted.
(E) The plan or issuer complies with such
other conditions as the Secretary may by
regulation require for activities conducted
under this paragraph.
(d) Prohibition
information
(1)

on

collection

of

genetic

In general

A group health plan, and a health insurance

issuer offering health insurance coverage in
connection with a group health plan, shall not
request, require, or purchase genetic information
for underwriting purposes (as defined in section
300gg-91 of this title).
(2) Prohibition
on
collection
of
information prior to enrollment

genetic

A group health plan, and a health insurance

issuer offering health insurance coverage in
connection with a group health plan, shall not
request, require, or purchase genetic information
with respect to any individual prior to such
individuals enrollment under the plan or coverage
in connection with such enrollment.

App. 87a
(3)

Incidental collection

If a group health plan, or a health insurance

issuer offering health insurance coverage in
connection with a group health plan, obtains
genetic information incidental to the requesting,
requiring, or purchasing of other information
concerning any individual, such request,
requirement, or purchase shall not be considered
a violation of paragraph (2) if such request,
requirement, or purchase is not in violation of
paragraph (1).
(e)

Application to all plans

The provisions of subsections (a)(6), (b)(3), (c), and

(d) and subsection (b)(1) and section 300gg-3 of this
title with respect to genetic information, shall apply to
group health plans and health insurance issuers
without regard to section 300gg-21(a) of this title.
(f ) Genetic information of a fetus or embryo
Any reference in this part to genetic information
concerning an individual or family member of an
individual shall
(1) with respect to such an individual or family
member of an individual who is a pregnant
woman, include genetic information of any fetus
carried by such pregnant woman; and
(2) with respect to an individual or family
member utilizing an assisted reproductive
technology, include genetic information of any
embryo legally held by the individual or family
member.

App. 88a
(j)7

Programs of health promotion or disease

prevention
(1)

General provisions
(A)

General rule

For purposes of subsection (b)(2)(B), a

program of health promotion or disease
prevention (referred to in this subsection as a
wellness program) shall be a program
offered by an employer that is designed to
promote health or prevent disease that meets
the applicable requirements of this
subsection.
(B)

No conditions based on health status

factor

If none of the conditions for obtaining a

premium discount or rebate or other reward
for participation in a wellness program is
based on an individual satisfying a standard
that is related to a health status factor, such
wellness program shall not violate this
section if participation in the program is made
available to all similarly situated individuals
and the requirements of paragraph (2) are
complied with.
(C)

Conditions based on health status factor

If any of the conditions for obtaining a

premium discount or rebate or other reward
for participation in a wellness program is
based on an individual satisfying a standard
7

So in original; no subsecs. (g) to (i) were enacted.

App. 89a
that is related to a health status factor, such
wellness program shall not violate this
section if the requirements of paragraph (3)
are complied with.
(2) Wellness
programs
requirements

not

subject

to

If none of the conditions for obtaining a

premium discount or rebate or other reward under
a wellness program as described in paragraph
(1)(B) are based on an individual satisfying a
standard that is related to a health status factor
(or if such a wellness program does not provide
such a reward), the wellness program shall not
violate this section if participation in the program
is made available to all similarly situated
individuals. The following programs shall not have
to comply with the requirements of paragraph (3)
if participation in the program is made available
to all similarly situated individuals:
(A) A program that reimburses all or part of
the cost for memberships in a fitness center.
(B) A diagnostic testing program that
provides a reward for participation and does
not base any part of the reward on outcomes.
(C) A program that encourages preventive
care related to a health condition through the
waiver of the copayment or deductible
requirement under group8 health plan for the
costs of certain items or services related to a

So in original. Probably should be preceded by a [sic].

App. 90a
health condition (such as prenatal care or
well-baby visits).
(D) A program that reimburses individuals
for the costs of smoking cessation programs
without regard to whether the individual
quits smoking.
(E) A program that provides a reward to
individuals for attending a periodic health
education seminar.
(3)

Wellness programs subject to requirements

If any of the conditions for obtaining a

premium discount, rebate, or reward under a
wellness program as described in paragraph (1)(C)
is based on an individual satisfying a standard
that is related to a health status factor, the
wellness program shall not violate this section if
the following requirements are complied with:
(A) The reward for the wellness
program, together with the reward for other
wellness programs with respect to the plan
that requires satisfaction of a standard
related to a health status factor, shall not
exceed 30 percent of the cost of employee-only
coverage under the plan. If, in addition to
employees or individuals, any class of
dependents (such as spouses or spouses and
dependent children) may participate fully in
the wellness program, such reward shall not
exceed 30 percent of the cost of the coverage
in which an employee or individual and any
dependents are enrolled. For purposes of this
paragraph, the cost of coverage shall be

App. 91a
determined based on the total amount of
employer and employee contributions for the
benefit package under which the employee is
(or the employee and any dependents are)
receiving coverage. A reward may be in the
form of a discount or rebate of a premium or
contribution, a waiver of all or part of a costsharing mechanism (such as deductibles,
copayments, or coinsurance), the absence of a
surcharge, or the value of a benefit that would
otherwise not be provided under the plan. The
Secretaries of Labor, Health and Human
Services, and the Treasury may increase the
reward available under this subparagraph to
up to 50 percent of the cost of coverage if the
Secretaries determine that such an increase
is appropriate.
(B) The wellness program shall be
reasonably designed to promote health or
prevent disease. A program complies with the
preceding sentence if the program has a
reasonable chance of improving the health of,
or preventing disease in, participating
individuals and it is not overly burdensome, is
not a subterfuge for discriminating based on
a health status factor, and is not highly
suspect in the method chosen to promote
health or prevent disease.
(C) The plan shall give individuals
eligible for the program the opportunity to
qualify for the reward under the program at
least once each year.

App. 92a
(D) The full reward under the wellness
program shall be made available to all
similarly situated individuals. For such
purpose, among other things:
(i) The reward is not available to all
similarly situated individuals for a period
unless the wellness program allows
(I) for a reasonable alternative
standard (or waiver of the otherwise
applicable standard) for obtaining
the reward for any individual for
whom, for that period, it is
unreasonably difficult due to a
medical condition to satisfy the
otherwise applicable standard; and
(II) for a reasonable alternative
standard (or waiver of the otherwise
applicable standard) for obtaining
the reward for any individual for
whom, for that period, it is medically
inadvisable to attempt to satisfy the
otherwise applicable standard.
(ii) If
reasonable
under
the
circumstances, the plan or issuer may
seek verification, such as a statement
from an individuals physician, that a
health status factor makes it unreasonably
difficult or medically inadvisable for the
individual to satisfy or attempt to satisfy
the otherwise applicable standard.
(E) The plan or issuer involved shall disclose
in all plan materials describing the terms of

App. 93a
the wellness program the availability of a
reasonable alternative standard (or the
possibility of waiver of the otherwise
applicable
standard)
required
under
subparagraph (D). If plan materials disclose
that such a program is available, without
describing its terms, the disclosure under this
subparagraph shall not be required.
(k) Existing programs
Nothing in this section shall prohibit a program of
health promotion or disease prevention that was
established prior to March 23, 2010 and applied with
all applicable regulations, and that is operating on
such date, from continuing to be carried out for as long
as such regulations remain in effect.
(l) Wellness program demonstration project
(1)

In general

Not later than July 1, 2014, the Secretary, in

consultation with the Secretary of the Treasury
and the Secretary of Labor, shall establish a
10-State demonstration project under which
participating States shall apply the provisions of
subsection (j) to programs of health promotion
offered by a health insurance issuer that offers
health insurance coverage in the individual
market in such State.
(2)

Expansion of demonstration project

If the Secretary, in consultation with the

Secretary of the Treasury and the Secretary of
Labor, determines that the demonstration project

App. 94a
described in paragraph (1) is effective, such
Secretaries may, beginning on July 1, 2017 expand
such demonstration project to include additional
participating States.
(3)

Requirements
(A)

Maintenance of coverage

The Secretary, in consultation with the

Secretary of the Treasury and the Secretary
of Labor, shall not approve the participation of
a State in the demonstration project under
this section unless the Secretaries determine
that the States project is designed in a
manner that
(i) will not result in any decrease in
coverage; and
(ii) will not increase the cost to the
Federal Government in providing credits
under section 36B of Title 26 or cost-sharing
assistance under section 18071 of this title.
(B)

Other requirements

States
that
participate
in
the
demonstration project under this subsection
(i) may permit premium discounts or
rebates or the modification of otherwise
applicable copayments or deductibles for
adherence to, or participation in, a
reasonably designed program of health
promotion and disease prevention;
(ii) shall ensure that requirements of
consumer protection are met in programs

App. 95a
of health promotion in the individual
market;
(iii) shall require verification from
health insurance issuers that offer health
insurance coverage in the individual
market of such State that premium
discounts
(I) do not create undue burdens
for individuals insured in the individual
market;
(II)

do not lead to cost shifting;

and
(III) are not a subterfuge for
discrimination;
(iv) shall ensure that consumer data is
protected in accordance with the
requirements of section 264(c) of the
Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C.
1320d-2 note); and
(v) shall ensure and demonstrate to the
satisfaction of the Secretary that the
discounts or other rewards provided
under the project reflect the expected
level of participation in the wellness
program involved and the anticipated
effect the program will have on
utilization or medical claim costs.

App. 96a
(m)

Report
(1)

In general

Not later than 3 years after March 23, 2010,

the Secretary, in consultation with the Secretary
of the Treasury and the Secretary of Labor, shall
submit a report to the appropriate committees of
Congress concerning
(A) the effectiveness of wellness programs
(as defined in subsection (j)) in promoting
health and preventing disease;
(B) the impact of such wellness programs on
the access to care and affordability of coverage
for participants and non-participants of such
programs;
(C) the impact of premium-based and costsharing incentives on participant behavior
and the role of such programs in changing
behavior; and
(D) the effectiveness of different types of
rewards.
(2)

Data collection

In preparing the report described in

paragraph (1), the Secretaries shall gather
relevant information from employers who provide
employees with access to wellness programs,
including State and Federal agencies.
(n) Regulations
Nothing in this section shall be construed as
prohibiting the Secretaries of Labor, Health and

App. 97a
Human Services, or the Treasury from promulgating
regulations in connection with this section.

42 U.S.C. 300gg-5
THE ACAS MARKET REQUIREMENT OF
NON-DISCRIMINATION AMONG HEALTH
CARE PROVIDERS
Section 300gg-5. Non-discrimination in health care
(a)

Providers

A group health plan and a health insurance issuer

offering group or individual health insurance coverage
shall not discriminate with respect to participation
under the plan or coverage against any health care
provider who is acting within the scope of that
providers license or certification under applicable
State law. This section shall not require that a group
health plan or health insurance issuer contract with
any health care provider willing to abide by the terms
and conditions for participation established by the
plan or issuer. Nothing in this section shall be
construed as preventing a group health plan, a health
insurance issuer, or the Secretary from establishing
varying reimbursement rates based on quality or
performance measures.
(b)

Individuals

The provisions of section 218c of Title 29 (relating

to non-discrimination) shall apply with respect to a

App. 98a
group health plan or health insurance issuer offering
group or individual health insurance coverage.

42 U.S.C. 300gg-6
THE ACAS MARKET REQUIREMENT OF
NON-DISCRIMINATION TOWARDS CLINICAL
TRIAL EXPENSES
Section 300gg-6. Comprehensive health insurance
coverage
(a) Coverage
package

for

essential

health

benefits

A health insurance issuer that offers health

insurance coverage in the individual or small group
market shall ensure that such coverage includes the
essential health benefits package required under
section 18022(a) of this title.
(b)

Cost-sharing under group health plans

A group health plan shall ensure that any annual

cost-sharing imposed under the plan does not exceed
the limitations provided for under paragraph (1) of
section 18022(c) of this title.
(c)

Child-only plans

If a health insurance issuer offers health

insurance coverage in any level of coverage specified
under section 18031(d) of this title, the issuer shall also
offer such coverage in that level as a plan in which the

App. 99a
only enrollees are individuals who, as of the beginning
of a plan year, have not attained the age of 21.
(d) Dental only
This section shall not apply to a plan described in
section 18022(d)(2)(B)(ii)(I) of this title.

42 U.S.C. 300gg-8
THE ACAS MARKET REQUIREMENT THAT
HEALTH INSURANCE PLANS COVER
CERTAIN MINIMUM BENEFITS
Section
300gg-8.
Coverage
for
participating in approved clinical trials
(a)

individuals

Coverage
(1)

In general

If a group health plan or a health insurance

issuer offering group or individual health
insurance coverage provides coverage to a
qualified individual, then such plan or issuer
(A) may
not
deny
the
individual
participation in the clinical trial referred to in
subsection (b)(2);
(B) subject to subsection (c), may not deny
(or limit or impose additional conditions on)
the coverage of routine patient costs for items
and services furnished in connection with
participation in the trial; and

App. 100a
(C) may not discriminate against the
individual on the basis of the individuals
participation in such trial.
(2)

Routine patient costs

(A)

Inclusion

For purposes of paragraph (1)(B), subject

to subparagraph (B), routine patient costs
include all items and services consistent with
the coverage provided in the plan (or
coverage) that is typically covered for a
qualified individual who is not enrolled in a
clinical trial.
(B)

Exclusion

For purposes of paragraph (1)(B), routine

patient costs does not include
(i) the investigational item, device, or
service, itself;
(ii) items and services that are provided
solely to satisfy data collection and
analysis needs and that are not used in
the direct clinical management of the
patient; or
(iii) a service that is clearly inconsistent
with widely accepted and established
standards of care for a particular
diagnosis.
(3)

Use of in-network providers

If one or more participating providers is

participating in a clinical trial, nothing in

App. 101a
paragraph (1) shall be construed as preventing a
plan or issuer from requiring that a qualified
individual participate in the trial through such a
participating provider if the provider will accept
the individual as a participant in the trial.
(4)

Use of out-of-network

Notwithstanding paragraph (3), paragraph

(1) shall apply to a qualified individual
participating in an approved clinical trial that is
conducted outside the State in which the qualified
individual resides.
(b)

Qualified individual defined

For purposes of subsection (a), the term qualified

individual means an individual who is a participant
or beneficiary in a health plan or with coverage
described in subsection (a)(1) and who meets the
following conditions:
(1) The individual is eligible to participate in
an approved clinical trial according to the trial
protocol with respect to treatment of cancer or
other life-threatening disease or condition.
(2)

Either
(A) the
referring
health
care
professional is a participating health care
provider and has concluded that the
individuals participation in such trial
would be appropriate based upon the
individual meeting the conditions
described in paragraph (1); or

App. 102a
(B) the participant or beneficiary
provides
medical
and
scientific
information establishing that the
individuals participation in such trial
would be appropriate based upon the
individual meeting the conditions
described in paragraph (1).
(c)

Limitations on coverage

This section shall not be construed to require a

group health plan, or a health insurance issuer
offering group or individual health insurance coverage,
to provide benefits for routine patient care services
provided outside of the plans (or coverages) health
care provider network unless out-of-network benefits
are otherwise provided under the plan (or coverage).
(d) Approved clinical trial defined
(1)

In general

In this section, the term approved clinical

trial means a phase I, phase II, phase III, or phase
IV clinical trial that is conducted in relation to the
prevention, detection, or treatment of cancer or
other life-threatening disease or condition and is
described in any of the following subparagraphs:
(A)

Federally funded trials

The study or investigation is approved or

funded (which may include funding through
in-kind contributions) by one or more of the
following:
(i) The National Institutes of Health.

App. 103a
(ii) The Centers for Disease Control and
Prevention.
(iii) The Agency for
Research and Quality.
(iv) The Centers
Medicaid Services.

for

Health

Care

Medicare

&

(v) cooperative9 group or center of any of

the entities described in clauses (i)
through (iv) or the Department of
Defense or the Department of Veterans
Affairs.
(vi) A
qualified
non-governmental
research entity identified in the
guidelines issued by the National
Institutes of Health for center support
grants.
(vii) Any of the following if the
conditions described in paragraph (2) are
met:
(I) The Department of Veterans
Affairs.
(II)

The Department of Defense.

(III) The Department of Energy.

(B) The study or investigation is
conducted under an investigational new drug
application reviewed by the Food and Drug
Administration.

So in original. Probably should be preceded by A [sic].

App. 104a
(C) The study or investigation is a drug
trial that is exempt from having such an
investigational new drug application.
(2)

Conditions for Departments

The conditions described in this paragraph,

for a study or investigation conducted by a
Department, are that the study or investigation
has been reviewed and approved through a system
of peer review that the Secretary determines
(A) to be comparable to the system of peer
review of studies and investigations used by
the National Institutes of Health, and
(B) assures unbiased review of the highest
scientific standards by qualified individuals
who have no interest in the outcome of the
review.
(e)

Life-threatening condition defined

In this section, the term life-threatening

condition means any disease or condition from which
the likelihood of death is probable unless the course of
the disease or condition is interrupted.
(f ) Construction
Nothing in this section shall be construed to limit
a plans or issuers coverage with respect to clinical
trials.

App. 105a
(g)

Application to FEHBP

Notwithstanding any provision of chapter 89 of

Title 5 this section shall apply to health plans offered
under the program under such chapter.
(h)

Preemption

Notwithstanding any other provision of this Act,

nothing in this section shall preempt State laws that
require a clinical trials policy for State regulated
health insurance plans that is in addition to the policy
required under this section.

42 U.S.C. 300gg-22
THE ACAS ENFORCEMENT REGIME
Section 300gg-22. Enforcement
(a) State enforcement
(1)

State authority

Subject to section 300gg-23 of this title, each

State may require that health insurance issuers
that issue, sell, renew, or offer health insurance
coverage in the State in the individual or group
market meet the requirements of this part with
respect to such issuers.
(2)

Failure to implement provisions

In the case of a determination by the

Secretary that a State has failed to substantially
enforce a provision (or provisions) in this part with
respect to health insurance issuers in the State,

App. 106a
the Secretary shall enforce such provision (or
provisions) under subsection (b) of this section
insofar as they relate to the issuance, sale,
renewal, and offering of health insurance coverage
in connection with group health plans or
individual health insurance coverage in such
State.
(b)

Secretarial enforcement authority

(1)

Limitation

The provisions of this subsection shall apply

to enforcement of a provision (or provisions) of this
part only
(A) as provided under subsection (a)(2) of
this section; and
B) with respect to individual health
insurance coverage or group health plans that
are non-Federal governmental plans.
(2)

Imposition of penalties
In the cases described in paragraph (1)
(A)

In general

Subject to the succeeding provisions of

this
subsection,
any
non-Federal
governmental plan that is a group health plan
and any health insurance issuer that fails to
meet a provision of this part applicable to
such plan or issuer is subject to a civil money
penalty under this subsection.
(B)

Liability for penalty

In the case of a failure by

App. 107a
(i) a health insurance issuer, the issuer
is liable for such penalty, or
(ii) a group health plan that is a nonFederal governmental plan which is
(I) sponsored by 2 or more
employers, the plan is liable for such
penalty, or
(II) not so sponsored, the employer
is liable for such penalty.
(C)

Amount of penalty
(i)

In general

The maximum amount of penalty

imposed under this paragraph is $100 for
each day for each individual with respect
to which such a failure occurs.
(ii) Considerations in imposition
In determining the amount of any
penalty to be assessed under this
paragraph, the Secretary shall take into
account the previous record of compliance
of the entity being assessed with the
applicable provisions of this part and the
gravity of the violation.
(iii)

Limitations
(I) Penalty not to apply where
failure not discovered exercising
reasonable diligence
No civil money penalty shall be
imposed under this paragraph on

App. 108a
any failure during any period for
which it is established to the
satisfaction of the Secretary that
none of the entities against whom the
penalty would be imposed knew, or
exercising
reasonable
diligence
would have known, that such failure
existed.
(II) Penalty not to apply to failures
corrected within 30 days
No civil money penalty shall be
imposed under this paragraph on
any failure if such failure was due to
reasonable cause and not to willful
neglect, and such failure is corrected
during the 30-day period beginning
on the first day any of the entities
against whom the penalty would be
imposed
knew,
or
exercising
reasonable diligence would have
known, that such failure existed.
(D)

Administrative review
(i)

Opportunity for hearing

The entity assessed shall be afforded

an opportunity for hearing by the
Secretary upon request made within 30
days after the date of the issuance of a
notice of assessment. In such hearing the
decision shall be made on the record
pursuant to section 554 of Title 5. If no
hearing is requested, the assessment

App. 109a
shall constitute a final and unappealable
order.
(ii)

Hearing procedure

If a hearing is requested, the initial

agency decision shall be made by an
administrative law judge, and such
decision shall become the final order
unless the Secretary modifies or vacates
the decision. Notice of intent to modify or
vacate the decision of the administrative
law judge shall be issued to the parties
within 30 days after the date of the
decision of the judge. A final order which
takes effect under this paragraph shall be
subject to review only as provided under
subparagraph (E).
(E)

Judicial review
(i) Filing of action for review
Any entity against whom an order
imposing a civil money penalty has been
entered after an agency hearing under
this paragraph may obtain review by the
United States district court for any
district in which such entity is located or
the United States District Court for the
District of Columbia by filing a notice
of appeal in such court within 30 days
from the date of such order, and
simultaneously sending a copy of such
notice by registered mail to the Secretary.

App. 110a
(ii)

Certification of administrative record

The Secretary shall promptly certify

and file in such court the record upon
which the penalty was imposed.
(iii) Standard for review
The findings of the Secretary shall be
set aside only if found to be unsupported
by substantial evidence as provided by
section 706(2)(E) of Title 5.
(iv)

Appeal

Any final decision, order, or judgment

of the district court concerning such
review shall be subject to appeal as
provided in chapter 83 of Title 28.
(F) Failure to pay assessment; maintenance of
action
(i)

Failure to pay assessment

If any entity fails to pay an

assessment after it has become a final
and unappealable order, or after the court
has entered final judgment in favor of the
Secretary, the Secretary shall refer the
matter to the Attorney General who shall
recover the amount assessed by action in
the appropriate United States district
court.

App. 111a
(ii) Nonreviewability
In such action the validity and
appropriateness of the final order
imposing the penalty shall not be subject
to review.
(G)

Payment of penalties

Except as otherwise provided, penalties

collected under this paragraph shall be paid
to the Secretary (or other officer) imposing the
penalty and shall be available without
appropriation and until expended for the
purpose of enforcing the provisions with
respect to which the penalty was imposed.
(3) Enforcement authority relating to genetic
discrimination
(A)

General rule

In the cases described in paragraph (1),

notwithstanding the provisions of paragraph
(2)(C), the succeeding subparagraphs of this
paragraph shall apply with respect to an
action under this subsection by the Secretary
with respect to any failure of a health
insurance issuer in connection with a group
health plan, to meet the requirements of
subsection (a)(1)(F), (b)(3), (c), or (d) of section
2702 or section 2701 or 2701(b)(1) with
respect to genetic information in connection
with the plan.

App. 112a
(B)

Amount
(i)

In general

The amount of the penalty imposed

under this paragraph shall be $100 for
each day in the noncompliance period
with respect to each participant or
beneficiary to whom such failure relates.
(ii) Noncompliance period
For purposes of this paragraph, the
term noncompliance period means, with
respect to any failure, the period
(I) beginning on the date such
failure first occurs; and
(II) ending on the date the failure is
corrected.
(C)

Minimum penalties where failure discovered

Notwithstanding clauses (i) and (ii) of

subparagraph (D):
(i)

In general

In the case of 1 or more failures with

respect to an individual
(I) which are not corrected before the
date on which the plan receives a notice
from the Secretary of such violation; and
(II) which occurred or continued during
the period involved;
the amount of penalty imposed by
subparagraph (A) by reason of such failures

App. 113a
with respect to such individual shall not be
less than $2,500.
(ii) Higher
minimum
penalty
violations are more than de minimis

where

To the extent violations for which any

person is liable under this paragraph for any
year are more than de minimis, clause (i) shall
be applied by substituting $15,000 for
$2,500 with respect to such person.
(D)

Limitations
(i) Penalty not to apply where failure not
discovered exercising reasonable diligence
No penalty shall be imposed by
subparagraph (A) on any failure during any
period for which it is established to the
satisfaction of the Secretary that the person
otherwise liable for such penalty did not know,
and exercising reasonable diligence would not
have known, that such failure existed.
(ii) Penalty not to apply to failures corrected
within certain periods
No penalty shall be imposed
subparagraph (A) on any failure if

by

(I) such failure was due to reasonable

cause and not to willful neglect; and
(II) such failure is corrected during the
30-day period beginning on the first date
the person otherwise liable for such
penalty knew, or exercising reasonable

App. 114a
diligence would have known, that such
failure existed.
(iii) Overall limitation for unintentional
failures
In the case of failures which are due to
reasonable cause and not to willful neglect,
the penalty imposed by subparagraph (A) for
failures shall not exceed the amount equal to
the lesser of
(I) 10 percent of the aggregate amount
paid or incurred by the employer (or
predecessor employer) during the
preceding taxable year for group health
plans; or
(II) $500,000.
(E)

Waiver by Secretary

In the case of a failure which is due to

reasonable cause and not to willful neglect, the
Secretary may waive part or all of the penalty
imposed by subparagraph (A) to the extent that
the payment of such penalty would be excessive
relative to the failure involved.

App. 115a
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
STATE OF WEST VIRGINIA,
EX REL. PATRICK MORRISEY
in his official capacity as
Attorney General of West Virginia
State Capitol Building 1, Room E-26
Charleston, WV 25305;
Plaintiff,
v.

Civil Action No. 14-1287

UNITED STATES DEPARTMENT OF

HEALTH AND HUMAN SERVICES
200 Independence Avenue, SW
Washington, D.C. 20201
Defendant.
COMPLAINT
(Filed Jul. 29, 2014)
1. This case involves core questions about the
rule of law and the proper role of the President and the
States in our system of government.
2. The Constitution prohibits the President from
picking and choosing the laws that he enforces based
on political convenience. The President has specified
and defined authority to veto legislation, in its entirety,
before it becomes law. See U.S. Const. art. I, 7; see also
Clinton v. City of New York, 524 U.S. 417 (1998). But
after a bill becomes the law of the land, the Take Care

App. 116a
Clause of the Constitution requires that the President
faithfully execute[ ] the law. U.S. Const. art. II, 3.
3. President Obama and his agencies, however,
have demonstrated a consistent and ongoing pattern
of unlawfully and unilaterally amending or
suspending the enforcement of duly enacted federal
statutes to achieve the Administrations political
agenda. Examples include the halting of federally
mandated deportations for certain undocumented
immigrants, the suspension of the federally mandated
welfare work requirement, the granting of healthcare
premium subsidies to congressional employees, and
the provision of retroactive subsidies towards
insurance purchased outside of the ACAs exchanges.
4. The Administration has also demonstrated a
pattern of ignoring unambiguous statutory limitations
on its authority, when such statutory limitations
conflict with the Administrations political or policy
goals. Most recently, the Presidents Environmental
Protection Agency (EPA) has proposed to regulate
existing coal-fired power plants under Section 111(d)
of the Clean Air Act, 42 U.S.C. 7411(d),
notwithstanding EPAs admission that the literal
terms of the Clean Air Act prohibits exactly such
regulations.
5. This case challenges one such unlawful
actionthe so-called Administrative Fix of the
Patient Protection and Affordable Care Act (ACA)by
which the President has sought to shift to the States
the burden and political responsibility for the

App. 117a
cancellation or approval of individual health plans
that do not comply with several requirements created
by the Presidents signature law.
6. The State of West Virginia believes that its
citizens should be able to keep their individual health
insurance plans if they like them. But the State also
believes that no President is above the law and that
this Administrations actions set a dangerous
precedent. The changes in the law necessary to ensure
that the States citizens and all Americans can keep
their desired plans must be obtained properly through
the democratic process and in accordance with the
legislative procedures set forth in the Constitution.
7. Last fall, the President finally admitted that
contrary to the repeated promises he made to the
American peoplethe ACA makes many Americans
individual health plans unlawful to renew after
January 1, 2014, and subject to stiff federal penalties.
Rather than work with Congress to amend the ACA so
that federal law would no longer require those plans to
be cancelled, however, President Obama and his
agencies instead instituted the Administrative Fix.
8. Adopted without any advance notice or
opportunity for public comment, the Administrative
Fix unilaterally suspends federal enforcement of the
ACA against individual plans made illegal by the ACA
and fundamentally transforms what Congress
intended to be a regime of cooperative federalism.
Prior to the Administrative Fix, the ACA gave the
States the option of enforcing the laws federal

App. 118a
requirements against non-compliant individual health
plans, but required the federal Department of Health
and Human Services to enforce the requirements if the
States declined to do so. The States thus had no
authority over whether the federally mandated
requirements would ultimately be enforced. But under
the Administrative Fix, HHS abdicated its
enforcement role and left the States solely
responsibleand accountablefor deciding whether
federal law would be enforced.
9. With the Administrative Fix, the President
intentionally and improperly sought to shift to the
States the potential political burden for the
cancellation of individual health plans. In announcing
the new rule, he explained his desire to be able to say
to these folks, you know what, the Affordable Care Act
is not going to be the reason why insurers have to
cancel your plan. He stressed that after the
Administrative Fix, it would be state insurance
commissioners [who] still have the power to decide
what plans can and cant be sold in their states.
Although the ACA still makes it unlawful to renew an
individual plan that does not comply with the laws
federally mandated market requirements, the
President has attempted to transfer the legal and
political responsibility to the States by giving them
exclusive authority to determine whether to actually
enforce the ACAs prohibition.
10. The Administrative Fix is an unlawful
agency rule for several reasons.

App. 119a
a. First, it is contrary to the ACA. Under the
ACAs enforcement scheme, HHS shall enforce
the Acts eight market requirements against
individual health plans if the States do not do so.
Put another way, the ACA sets up a mandatory
regime of cooperative state/federal enforcement.
The Act prohibits HHS from leaving enforcement
discretion over the ACAs eight federal market
requirements solely to the States.
b. Second, the Administrative Fix was
promulgated
without
public
notice
and
opportunity to comment as required by the
Administrative Procedure Act.
c. Third, the Administrative Fix constitutes
unlawful delegation of federal executive and
legislative powers by the Executive Branch to
States.
d. Fourth, the Administrative Fix violates
the States sovereignty under the Tenth
Amendment and interferes with constitutional
principles of federalism. By making States solely
responsible for determining under federal law
whether plans made illegal by the ACA must be
cancelled, the President has unlawfully
conscripted States into federal service, making
them part of the federal regulatory system and
deliberately diminish[ing] the accountability of
. . . federal officials at the expense of the States.
New York v. United States, 505 U.S. 144, 168
(1992).
11. The State of West Virginia seeks judicial
intervention against the Administrative Fix to

App. 120a
vindicate the rule of law and protect itself from the
harm of becoming the sole enforcer of federal law.
While consumers should be able to keep their health
plans and States should be allowed to exercise their
enforcement authority as they so choose, the President
cannot ignore a duly enacted federal law or make the
States exclusively responsible for enforcing that law.
THE PARTIES
12. Plaintiff the State of West Virginia is a
sovereign State that regulates health insurance within
its borders through duly enacted state laws
administered by state officials and constituent
agencies.
13. It appears by and through Patrick Morrisey,
Attorney General of West Virginia.
14. Defendant U.S. Department of Health and
Human Services (HHS) is an executive, Cabinet-level
agency of the United States within the meaning of the
Administrative Procedure Act. See 5 U.S.C. 551(1)
(APA). HHS and its sub-agencies are charged with
administering many of the provisions of the Patient
Protection and Affordable Care Act, Pub. L.
No. 111-148, 124 Stat. 119 (2010), as amended by the
Health Care and Education Reconciliation Act of 2010,
Pub. L. No. 111-152, 124 Stat. 1029 (2010) (codified as
amended in scattered sections of the code). Those subagencies within HHS include the Centers for Medicare
and Medicaid Services (CMS) and the Center for

App. 121a
Consumer Information and Insurance Oversight
(CCIIO).
15. The relief requested in this action is sought
against: the Defendant; the Defendants officers,
employees, and agents; and all persons acting in
cooperation with the Defendant or under the
Defendants supervision, direction, or control.
JURISDICTION AND VENUE
16. This case arises under the APA, 5 U.S.C.
701-706, and under the Constitution and laws of the
United States.
17. This Court has federal-question jurisdiction
under 28 U.S.C. 1331 and 1341.
18. The Court may award declaratory and
injunctive relief under the APA, as well as 28 U.S.C.
1361, 2201-2202 and Federal Rules of Civil
Procedure 57 and 65.
19. Venue is proper under 28 U.S.C. 1391(b)
and (e)(l) because the Defendant is an agency of the
United States and resides in this district.
FACTUAL ALLEGATIONS
A.

The ACAs Eight Federally Mandated Market

Requirements

20. Under the ACA, all individual health

insurance plans begun or renewed after January 1,
2014, must comply with eight federally mandated

App. 122a
market requirements, unless they qualify for the
grandfathering exception. 42 U.S.C. 300gg 300gg6, 300gg-8; id. 18011; see also ACA 1255 (effective
for plan years beginning on or after January 1, 2014).
21. While the ACA as a whole imposes many
mandates on many actors, these eight federally
mandated market requirements relate to fair health
insurance premiums; guaranteed availability of
coverage; guaranteed renewability of coverage; the
prohibition of pre-existing condition exclusions or
other discrimination based on health status; the
prohibition of discrimination against individual
participants and beneficiaries based on health status;
non-discrimination in health care; comprehensive
health insurance coverage; and coverage for
individuals participating in approved clinical trials. 42
U.S.C. 300gg 300gg-6, 300gg-8.
22. As described more fully below, federal law
creates an enforcement regime that: (a) permits the
States the first opportunity to voluntarily enforce
these federally mandated market requirements by
restricting the issuance of non-compliant individual
health plans; and (b) requires Defendant HHS to
enforce the requirements if the States do not do so. 42
U.S.C. 300gg-22; see also 78 Fed. Reg. 13406, 13419.
23. The regime resembles an arrangement used
in
other
federal
lawscalled
cooperative
federalismin which States are given the chance to
voluntarily participate in the application of federal
standards but are backstopped by mandatory

App. 123a
enforcement by the federal government if the States
choose not to enforce them.
a.

Voluntary State Enforcement Against

Insurers

24. Every State has long had the authority to

restrict the sale of individual insurance plans in his
or her State. E.g., W. Va. Code 33-6-8; see also id.
33-2-10 (listing the States authority to regulate the
insurance market and protect the interests of
policyholders).
25. Consistent with this pre-existing role in
regulating health insurance, see, e.g., 15 U.S.C. 1011,
1012, federal law grants the States the initial
opportunity to voluntarily enforce the ACAs eight
federal market requirements against the issuers of
individual insurance plans, see 42 U.S.C. 300gg22(a)(1) ([E]ach State may require that health
insurance issuers . . . meet the requirements of this
part.).
26. Soon after Congress enacted and the
President signed the ACA, many States indicated
whether they intendedconsistent with their
own state lawsto enforce some or all of the eight
federally mandated requirements. See, e.g., National
Association of Insurance Commissioners, Survey on
State Authority to Enforce PPACA Immediate
Implementation Provisions (Aug. 5, 2010), http://
www.naic.org/documents/index_health_reform_section_
ppaca_state_enforcement_authority.pdf (attached as
Exh. 1).

App. 124a
b.

Mandatory Federal Enforcement Against

Insurers

27. In contrast to the States, Defendant HHS has

no discretion under federal law whether or not to
enforce the Acts eight federal requirements against
insurers who issue individual health insurance plans.
28. If a State does not enforce the eight federally
mandated market requirements, the Secretary of HHS
must make a determination of such nonenforcement,
at which point the Secretary [of HHS] shall enforce
[the provisions of this part] insofar as they relate to
the issuance, sale, renewal, and offering of health
insurance coverage. 42 U.S.C. 300gg-22(a)(2)
(emphasis added); see also 45 C.F.R. 150.203
(requiring CMS enforcement (emphasis added)).
29. Federal enforcement entails the possibility of
significant fines on noncompliant insurers. The
Secretary may fine violators up to $100 per day per
individual affected by the insurers noncompliance. 42
U.S.C. 300gg-22(b)(2)(C); see also 45 C.F.R. 150.315.
30. If an insurer fails to pay a penalty after it has
exhausted its administrative and judicial review, the
Secretary shall refer the matter to the Attorney
General for legal action. 42 U.S.C. 300gg22(b)(2)(F)(ii).
31. Furthermore, the funds gained from
enforcement actions are specifically earmarked to
finance future HHS enforcement. 42 U.S.C. 300gg22(b)(2)(G) (providing that penalties paid to the

App. 125a
Secretary (or other officer) imposing the penalty . . .
shall be available . . . for the purpose of enforcing the
provisions with respect to which the penalty was
imposed).
B. The Grandfathering Exception to the Acts
Eight
Federally
Mandated
Market
Requirements
32. The Affordable Care Acts grandfathering
provision provides the lone exception to the Acts
mandate that all individual health insurance plans
comply with the Acts eight federally mandated market
requirements.
33. As interpreted by an HHS rule, the
grandfathering provision exempts individual health
insurance plans that were in existence on March 23,
2010 and have not been significantly modified.
a. Under Section 1251 of the Act, individual
health insurance plans already in existence on
March 23, 2010 need not comply with the eight
federally mandated requirements. See 42 U.S.C.
18011(1) (Nothing in this Act . . . shall be
construed to require that an individual terminate
coverage . . . in which such individual was enrolled
on March 23, 2010.).
b. But HHS has issued a rule that removes
from eligibility for grandfather status any plans in
existence on March 23, 2010 that an insurer
subsequently modified in certain ways. 45 C.F.R.
147.140. Under the rule, for example, a plan
loses grandfather status if an insurer makes any

App. 126a
increase . . . in a percentage cost-sharing
requirement. 45 C.F.R. 147.140(g)(1)(ii).
34. With this rule in place, Defendant HHS has
estimated that the percentage of individual market
policies losing grandfather status in a given year [will
exceed] the 40 percent to 67 percent range. 75 Fed.
Reg. 34538, 34553 (June 17, 2010).
C. The Administrative Fix
35. Because many individual health insurance
plans neither qualified for grandfathering nor
complied with the ACAs eight federal market
requirements, insurance companies nationwide sent
cancellation notices to their customers in the months
before the federal requirements took effect on
January 1, 2014.
36. These cancellation notices resulted in
widespread criticism that President Obama had
violated his oft-repeated pledge that if you like your
health care plan, you can keep your health care plan.
See, e.g., Barack Obama, U.S. President, Remarks by
the President in Health Insurance Reform Town Hall
(Aug. 11, 2009), available at http://www.whitehouse.
gov/the-press-office/remarks-president-town-hall-healthinsurance-reform-portsmouth-new-hampshire (attached
as Exh. 2).
37. Congress began preparing to amend the Act
in order to stop the cancellation of health insurance
plans. See, e.g., Keep Your Health Plan Act of 2013,
H.R. 3350, 113th Cong. (2013); Keeping the Affordable

App. 127a
Care Act Promise Act, S. 1642, 113th Cong. (2013).
West Virginia and many other States support
legislative solutions like these that could lawfully
allow individuals to keep their health insurance plans.
38. The President, however, sought to preempt
any congressional action that would have addressed
the problem legally and led to a permanent cure to the
problem. In fact, he formally threatened to veto a bill
that would allow people to keep their individual health
insurance plans. Office of Mgmt. & Budget, Executive
Office of the President, Statement of Administration
Policy, H.R. 3350Keep Your Health Plan Act of 2013
(Nov. 14, 2013) (attached as Exh. 3).
39. Instead, acting through Defendant HHS, the
President unilaterally sought to fix the problem
administratively for a limited period of timelong
enough for him to avoid political accountability.
a.

The Presidents Announcement of the

Administrative Fix

40. On November 14, 2013, the President held

a press conference to announce that he and his
Administration would do everything we can to fix this
problem. Barack Obama, President, Statement by the
President on the Affordable Care Act at 2 (Nov. 14,
2013), available at http://www.whitehouse.gov/the-pressoffice/2013/11/14/statement-president-affordable-careact (attached as Exh. 4) (hereinafter Presidential
Press Conference). He stated: I completely get how
upsetting this can be for a lot of Americans,
particularly after assurances they heard from me that

App. 128a
if they had a plan that they liked, they could keep it.
And to those Americans, I hear you loud and clear. Id.
41. The President explained his intent to take
action through his administrative agencies to allow
insurers [to] extend current plans that would
otherwise be canceled into 2014, and [allow]
Americans whose plans have been cancelled [to] choose
to re-enroll in the same kind of plan. Id.; see also Press
Release, White House, Fact Sheet: New Administration
Proposal to Help Consumers Facing Cancellations at 1
(Nov. 14, 2013) (citing HHSs administrative
authority), available at http://www.whitehouse.gov/thepress-office/2013/11/14/fact-sheet-new-administrationproposal-help-consumers-facing-cancellatio [sic] (attached
as Exh. 5) (hereinafter Administrative Fix Fact
Sheet).
42. Essentially, he was going to extend the
principle of the ACAs grandfathering provision to
those people whose individual health plans did not
qualify under the grandfathering rule. Presidential
Press Conference, Exh. 4 at 2.
43. The President acknowledged that state
insurance commissioners still have the power to decide
what plans can and cant be sold in their states. Id.
But, he explained, what we want to do is to be able to
say to these folks, you know what, the Affordable Care
Act is not going to be the reason why insurers have to
cancel your plan. Id. at 4; Administrative Fix Fact
Sheet, Exh. 5 at 2 (Whether an individual can keep
their current plan will also depend on their insurance

App. 129a
company and State insurance commissionerbut
todays action means that it will no longer be
implementation of the law that is forcing them to buy
a new plan.).
b.

HHS Formalizes the Administrative Fix

as a Binding Rule

44. The same day as the Presidents press

conference, HHS announced that it would suspend
enforcement of these eight federal market
requirements and that it would encourage States to
facilitate insurers issuance and consumers renewal of
plans not compliant with the federally mandated
market requirements.
45. In a letter addressed to all state insurance
commissioners, HHS committed not to penalize the
one-year renewal of individual non-grandfathered
plans that, due to non-compliance with the eight
federally mandated market requirements, are
prohibited by the ACA from being renewed after
January 1, 2014. See Letter from Gary Cohen, Director,
CCIIO, to Insurance Commissioners (Nov. 14, 2013),
http://www.cms.gov/CCIIO/Resources/Letters/Down
loads/commissioner-letter-11-14-2013.pdf (attached as
Exh. 6) (hereinafter Administrative Fix Letter). The
letter explained that HHS would not punish any such
renewals made after January 1, 2014, and before
October 1, 2014. Id.
46. HHS stated its intent to give health
insurance issuers the discretion to choose to continue
coverage that would otherwise be terminated or

App. 130a
cancelled, subject to two conditions. Id. at 1. First, the
plan had to be in effect on October 1, 2013. Second, the
insurance issuer has to send affected customers a
notice containing information about the Acts health
insurance exchanges and the federally mandated
market requirements with which the plan is not
complying. Id. at 2. A week later, CMS promulgated
forms that insurers must use for this purpose. Gary
Cohen, Director, CCIIO, Insurance Standards Bulletin
SeriesINFORMATION (Nov. 21, 2013), http://www.
cms.gov/CCIIO/Resources/Regulations-and-Guidance/
Downloads/standard-notice-bulletin-11-21-2013.pdf
(attached as Exh. 7) (hereinafter Insurer Disclosure
Rule).
47. If these conditions are satisfied, HHS
committed unequivocally thatfor its purposesan
otherwise non-compliant individual health plan will
not be considered out of compliance with the [eight
federal] market reforms. Administrative Fix Letter,
Exh. 6 at 1.
48. In short, the letter informed the States that,
notwithstanding its statutory mandate to enforce the
eight federal market requirements, HHS will
categorically refuse to enforce those requirements.
Instead of enforcing the federal requirements if a State
lacks the necessary authority or fails to substantially
enforce a provision, 45 C.F.R. 150.203, as the ACA
requires, HHS has suspended its own enforcement
entirely, provided the agencys conditions are met.

App. 131a
49. The letter also expressly encouraged those
State agencies responsible for enforcing the specified
market reforms to adopt the same transitional
policy. Administrative Fix Letter, Exh. 6 at 3. HHS
recognized that individuals and insurance companies
with plans made unlawful by the ACA cannot benefit
from the Administrative Fix unless their State also
chooses, consistent with the Administrative Fix, not to
enforce the federally mandated requirements and not
to restrict the sale of such plans.
50. Finally, the letter stated that HHS would
consider whether to extend the Administrative Fix
beyond the specified time frame to which it had
already committed. Id. at 1.
51. On March 5, 2014, HHS extended the
Administrative Fix by two years. See Gary Cohen,
Director, CCIIO, Insurance Standards Bulletin
SeriesExtension of Transitional Policy through
October 1, 2016 (Mar. 5, 2014), http://www.cms.gov/
CCIIO/Resources/Regulations-and-Guidance/Downloads/
transition-to-compliant-policies-03-06-2015.pdf (attached
as Exh. 8). (hereinafter Extension Rule).
52. The agency committed to continue, for two
additional years, not to penalize the renewal of
individual plans that are not grandfathered and not
compliant with the eight federally mandated market
requirements. Id. at 2. Specifically, HHS will not
punish any such renewals for policy years that begin
by October 1, 2016. Id.

App. 132a
53. In short, provided that the two conditions
originally announced are met, HHS promised not to act
against individual health plans made unlawful by the
ACA until just before the next presidential election.
54. Like the Administrative Fix, this Extension
Rule recognized that it is now the option of the States
whether any individual health plans made unlawful by
the ACA can be sold within their borders. Indeed, HHS
set forth specifically what actions States could take to
allow their citizens to benefit from the extended
Administrative Fix. See id. at 2-3.
55. HHS further stated in the Extension Rule
that it would assess whether yet an additional oneyear extension of the Administrative Fix is
appropriate. Id.
56. Spokesmen for the President and HHS have
repeatedly justified the Administrative Fix as an
exercise of agency enforcement discretion under
Heckler v. Chaney, 470 U.S. 821 (1985). For example, a
spokesperson for HHS stated: [A]gencies charged
with administering statues [sic] have inherent
authority to exercise discretion to ensure that their
statutes are enforced in a manner that achieves
statutory goals and are consistent with other
administrative policies. Agencies may exercise this
discretion in appropriate circumstances, including
when implementing new or different regulatory
regimes, and to ensure that transitional periods do not
result in undue hardship. Greg Sargent, White House
Defends Legality of Obamacare Fix, Washington Post,

App. 133a
Nov. 14, 2013, available at http://www.washington
post.com/blogs/plum-line/wp/2013/11/14/white-housedefends-legality-of-obamacare-fix/ (attached as Exh. 9).
c.

A Binding Regulatory Framework

57. The Administrative Fix is final agency action

that sets out a substantive rule binding on the agency,
which the agency specifically designed as a norm or
safe harbor by which [private parties] are expected to
shape their actions. General Electric Co. v. EPA, 290
F.3d 377, 383 (D.C. Cir. 2002).
58. The language and structure of the
Administrative Fixs comprehensive change to the
federal enforcement regime, as well as the Defendants
actions and statements, make clear that the
Administrative Fix is binding upon HHS:
a. The Administrative Fix represents the
official positions and actions of HHS. All
documents relating to the Administrative Fix
and its extension were signed by Gary Cohen,
then-Director of CCIIO (a part of CMS, which is,
in turn, a part of HHS).
b. The agency documents use mandatory
and decisive language reflecting the binding
nature of the agencys commitment to its decision
not to enforce the ACAs eight federal market
requirements against individual health plans
when its two conditions are satisfied. E.g.,
Administrative Fix Letter, Exh. 6 at 1 (noting
that plans will not be considered to be out
of compliance (emphasis added)); Insurer

App. 134a
Disclosure Rule, Exh. 7 at 1 (same); Extension
Rule, Exh. 8 at 1, 3 (same).
c. The
agency
documents
speak
unequivocally about the ability of States and
insurers to permit the sale of individual health
plans made unlawful by the ACA, as well as the
ability of consumers to purchase such plans,
evidencing a commitment by HHS to honor those
choices notwithstanding the plain terms of the
ACA. E.g., Administrative Fix Letter, Exh. 6 at 1
(noting that health insurers may choose to
continue coverage that would otherwise be
terminated or cancelled, and affected individuals
. . . may choose to re-enroll); Insurer Disclosure
Rule, Exh. 7 at 1 (same); Extension Rule, Exh. 8 at
1 (same); id. at 2 (noting that certain large
businesses will have the option of renewing their
current policies . . . without their policies being
considered to be out of compliance and that
insurers may renew such policies); id. (noting the
option of the States to permit the sale of
individual health plans made illegal by the ACA
and that the States may choose and can elect
to do so).
d. HHS has set forth procedures and
provided a specific disclosure statement that will
be considered to satisfy the requirement to notify
policyholders of the discontinuation of their
policies. Insurer Disclosure Rule, Exh. 7 at 2
(emphasis added); see also id. at 2, 3.
e. HHS has used language and taken actions
that presume the Administrative Fix is being and
will be followed by the agency. See Extension Rule,

App. 135a
Exh. 8 at 1 (observing that policies subject to the
transitional relief are not considered to be out of
compliance (emphasis added)); CCIIO, Options
Available for Consumers for Cancelled Policies
(Dec. 19, 2013), http://www.cms.gov/CCIIO/Resources/
Regulations-and-Guidance/index.html (follow
Options Available for Consumers with Cancelled
Policies hyperlink) (attached as Exh. 10) (noting
that [s]ome states have adopted the transitional
policy, enabling health insurance issuers to renew
their existing [non-compliant] plans and policies);
Gary Cohen, Director, CCIIO, Frequently Asked
Questions on Standard Notices for Transition
to ACA Compliant Policies (Nov. 21, 2013),
http://www.cms.gov/CCIIO/Resources/Regulationsand-Guidance/index.html (follow Questions on
Transition to ACA Compliant Policies hyperlink)
(attached as Exh. 11) (providing answers to FAQs
about the Administrative Fix).
f. HHS has separately adopted binding rule
changes to accommodate the economic impacts of
the Administrative Fix. On March 11, 2014, HHS
finalized a rule altering the reinsurance and risk
corridors programs to mitigate the Administrative
Fixs potentially destabilizing effects and financial
costs to insurers. See HHS Notice of Benefit and
Payment Parameters for 2015, 79 Fed. Reg. 13744
(Mar. 11, 2014) (to be codified at 45 C.F.R. pt. 144,
et al.).
g. Then, on May 27, 2014, HHS finalized
another rule amending the medical loss ratio
program and further altering the risk corridors
program based, again, on the potential financial
impacts of the Administrative Fix. See Exchange

App. 136a
and Insurance Market Standards for 2015 and
Beyond, 79 Fed. Reg. 30240 (May 27, 2014) (to be
codified at 45 C.F.R. pt. 144, et al.).
h. Finally, States, members of Congress, and
market observers have all uniformly understood
the administrative fix to be a binding agency
pronouncement. In particular, States have
permitted the sale of non-compliant individual
health plans within their borders based upon
HHSs commitment, and insurance companies
have extended such plans in those States.
59. Despite HHSs clear intent that the
Administrative Fix function as a binding rule, HHS did
not provide any notice to the public or opportunity to
comment before finalizing the Administrative Fix.
d.

Turning States from Optional Enforcers

Within a Cooperative Federalism Regime
Into Federal Policymakers

60. The Administrative Fix fundamentally

changes the States enforcement role with respect to
individual health plans and the eight federally
mandated market requirements.
61. Prior to HHSs adopting the Administrative
Fix, the States enforcement of the eight federal
market requirements took place within a cooperative
federalism scheme. Under that congressionally
mandated regime, the States had the option of
enforcing the federally mandated requirements
against non-compliant individual health plans, but if

App. 137a
the States did not do so, HHS had a mandatory
obligation to enforce the requirements.
62. Thus, under the regime provided by the ACA,
the States lacked the authority to determine whether
individual health plans made unlawful by the ACA
would be sold within their borders. Whatever a State
decided to do, the sale of non-compliant plans would be
punishedeither by the State or by HHS.
63. The Administrative Fix changed both the
federal and state enforcement roles. As HHS has
expressly recognized in communications to the state
insurance commissioners, the Administrative Fix
leaves the enforcement of the eight federally mandated
market requirements with respect to non-compliant
individual health plans entirely to the option of the
States. Extension Rule, Exh. 8 at 2.
a. Under the Administrative Fix, HHS
bound itself, notwithstanding its statutory
mandate, not to punish the sale of non-compliant
individual health plans, so long as certain
conditions unrelated to the ACAs market
requirements are met.
b. This abdication of responsibility at the
federal level shifts the enforcement burden
entirely to the States.
c. Although each State has the same
decision to make about enforcement that it had
before the Administrative Fix, the effect of that
decision is fundamentally different. Before the
Administrative Fix, a States enforcement decision
could not change whether non-compliant

App. 138a
individual health plans could be sold within the
State. But after the Administrative Fix, each
States decision is dispositive on that question. If a
State chooses not to enforce the eight federally
mandated requirements, those plans that satisfy
HHSs conditions will be permitted to be sold. If a
State chooses to enforce the federally mandated
requirements, however, none will be sold.
d. The Administrative Fix gives States the
exclusive authorityand burdento decide
whether non-compliant individual health plans
that satisfy HHSs two conditions will be sold in
their States. No federal executive agency or officer
will prohibit such sales.
64. By changing the States enforcement roles,
the Administrative Fix forces States to become federal
policymakers. States now fully control the extent to
which the eight federally mandated market
requirements will be enforced within their respective
States.
65. This is not a situation in which the federal
government has chosen not to regulate health
insurance, leaving the States free to regulate (or not)
according to state law as they see fit.
66. Instead, the ACA prohibits certain individual
health plans as a matter of federal law, and the
Administrative Fix has now pushed onto the States the
sole responsibility for determining the effect to give
that federal law.

App. 139a
D. Injury to the State of West Virginia from the
Administrative Fix
67. By fundamentally changing the cooperative
federalism regime created by the ACA for enforcement
of the eight federally mandated market requirements
against non-compliant individual health plans, the
Administrative Fix has harmed all States, including
the State of West Virginia.
68. First, the State has been injured by the
Administrative Fix by being forced to become the sole
and exclusive enforcer of federal law within its
borders.
69. Second, the Administrative Fix reduced the
political accountability of the federal government at
the expense of the States.
70. Prior to the Administrative Fix, there was no
question that the federal government was responsible
for the ACAs policy consequences. The federal
governmentthrough Congress and the President
adopted the ACA and its eight federal market
requirements. Under the cooperative federalism
regime provided by the ACA, the States had no
authority to decide that individual health plans made
unlawful by the ACA could be soldunpunished
within their borders. While the States could defer
punitive enforcement to the federal government by
refusing to participate, the ACA gave the States no
policymaking discretion over the ultimate enforcement
of federal law.

App. 140a
71. Under the Administrative Fix, the lines of
political accountability are far less certain. By
granting the States dispositive authority over the
enforcement of the eight federal requirements and
turning the States into federal policymakers, the
Administrative Fix createsat a minimum
confusion as to which government is actually to blame
for the ACAs policies. That confusion exists regardless
of whether the States choose to actually enforce the
eight federal requirements or not: in either
circumstance, the States will be held at least partly
accountable by their citizens for having made a federal
policy choice.
72. Indeed, the Presidents self-described
purpose in adopting the Administrative Fix was to
shift political accountability away from the federal
government to the States. He said: [W]hat we want to
do is to be able to say to these folks, you know what,
the Affordable Care Act is not going to be the reason
why insurers have to cancel your plan. Presidential
Press Conference, Exh. 4 at 4. He specifically noted
that after adopting the Administrative Fix, it would be
the state insurance commissioners [that] still have
the power to decide what plans can and cant be sold in
their states. Id. at 2; see also Administrative Fix Fact
Sheet, Exh. 5 at 2 (Whether an individual can keep
their current plan will also depend on their insurance
company and State insurance commissionerbut
todays action means that it will no longer be
implementation of the law that is forcing them to buy
a new plan.).

App. 141a
73. Consistent with the Presidents goal of
blurring political accountability, HHS formalized the
Administrative Fix by sending to all state insurance
commissioners a letter that made clear that the burden
was on the States to decide whether to adopt the same
transitional policy. Administrative Fix Letter, Exh. 6
at 3.
74. Similarly, in the Extension Rule, HHS
repeatedly stated that enforcement was now the
option of the States and also described in detail the
actions that States could (and would need to) take to
allow their citizens to benefit from the extended
Administrative Fix. Extension Rule, Exh. 8 at 2.
75. The States are clearly the targets of the
Administrative Fix.
76. This
blurred
political
accountability
diminishes the sovereignty of West Virginia and all
other States by interfering with the relationship
between state officials and their constituents,
inhibiting the ability of elections to properly hold
government and public officials accountable, and
harming the reputation and dignity of the States and
their officials and agencies. See Gregory v. Ashcroft, 501
U.S. 452, 460 (1991) (Through the structure of its
government, and the character of those who exercise
government authority, a State defines itself as a
sovereign.).
77. This injury to state sovereignty occurs no
matter what choice West Virginia or any other State
makes in response to the Administrative Fix.

App. 142a
78. Eleven States, through their attorneys
general, explained to HHS the unlawfulness of the
Administrative Fix in a letter dated December 26,
2013, commenting on a proposed rule altering the
reinsurance and risk corridors programs to mitigate
the Administrative Fixs potentially destabilizing
effects and financial costs to insurers. See Letter from
Patrick Morrisey, West Virginia Attorney General et
al., to Kathleen Sebelius, Secretary, HHS (Dec. 26,
2013) (attached as Exh. 12). HHS has never responded
to this letter or the allegations therein.
79. These States all agreed that their citizens
should be able to keep their health insurance plans if
they like them. The States objected to the
Administrative Fix, however, because it is flatly
illegal under federal constitutional and statutory law.
Id. at 1. The States explained: We support allowing
citizens to keep their health insurance coverage, but
the only way to fix this problem-ridden law is to enact
changes lawfully: through congressional action. Id. at
1.
E. The State of West Virginia Responds to the
Administrative Fix
80. On November 21, 2013, the West Virginia
Insurance Commissioner, Michael D. Riley, publicly
stated that he would not take the steps encouraged by
HHS to accommodate the Administrative Fix. Press
Release, West Virginia Offices of the Insurance
Commissioner, West Virginia Makes Announcement on

App. 143a
CCIIO Re-enrollment
(attached as Exh. 13).

Proposal

(Nov. 21, 2013)

81. The Insurance Commissioner explained that

the abrupt Administrative Fix comes at a time when
West Virginia employers, citizens and insurance
carriers have already made extensive changes to
comply with the new law. Id. In order to avoid further
confusion, provide market stability, mitigate potential
rate impacts of the CCIIO proposal, and regulate the
West Virginia insurance market in accordance with
the existing law, the Commissioner further explained,
we have decided to maintain our current direction.
Id.
82. On April 10, 2014, the Insurance
Commissioner responded to HHSs extension of the
Administrative Fix. See, e.g., Lydia Nuzum, NonCompliant Insurance Plans Get 3-Year Stay,
Charleston Gazette, 2014 WLNR 10711115, Apr. 19,
2014, available at http://www.wvgazette.com/article/
20140419/GZ01/140419179 (attached as Exh. 14).
83. The Commissioner chose then to take the
steps encouraged by HHS under the Extension Rule.
He committed not to restrict the renewal of certain
non-compliant plans for policy years that end by
October 2017. The Commissioner explained that it is
now up to the carriers as to whether they want to offer
non-compliant plans through that much longer
period. Id.

App. 144a
F.

The Federal Executive Branchs Pattern of

Unlawfully and Unilaterally Amending or
Suspending the Enforcement of Federal
Statutes

84. The Administrative Fix is part of a larger

pattern and practice by this Administration, which
shows that the Administration is capable of
reinstituting the Administrative Fix even if it expires
before judicial review runs its course.
85. On several occasions in different contexts,
federal officials have stated that they will not enforce
a federal statute at all or will suspend it for a selected
category of people, often if certain conditions are met.
For example, according to then-Secretary Kathleen
Sebelius, the Administration has implemented a
number of changes in the way the [ACA] was written.
Hearing on the Presidents Fiscal Year 2015 Budget
Proposal with U.S. Department of Health and Human
Services Secretary Kathleen Sebelius Before the H.
Comm. on Ways and Means, 113th Cong. (2014).
86. These actions are often justified on the same
basis as the Administrative Fixas enforcement
discretion under Heckler v. Chaney, 470 U.S. 821
(1985), even though Heckler provides no such
authority. And like the Administrative Fix, many of
these actions also purport to be temporary or
transitional with time frames potentially shorter
than the time necessary for full judicial review. Many
were also an attempt to short-circuit Congress by
precluding a legislative fix.

App. 145a
a.

Suspended
Statute

Enforcement

of

Federal

87. In June 2012, the Homeland Security

Secretary halted deportations for all undocumented
immigrants who meet certain age, educational, and
other
conditions.
Memorandum
from
Janet
Napolitano, Secretary of Homeland Security, to David
Aguilar, Acting Commissioner, U.S. Customs and
Border Protection, et al. (June 15, 2012) available
at http://www.dhs.gov/xlibrary/assets/s1-exercisingprosecutorial-discretion-individuals-who-came-to-us-aschildren.pdf (attached as Exh. 15).
88. According to HHS, the same enforcement
discretion at work in this immigration policy is at
work in the Administrative Fix. When the President
announced the Administrative Fix, an HHS
spokesperson stated: HHS . . . will be using its
enforcement discretion to allow for this transition.
Enforcement discretion can be used generally in
transitions, as well as a bridge towards legislation.
This is something that has been used, for example,
with the deferred action for childhood arrivals policy,
pending immigration reform. Transcript, White
House Background Briefing on Plan to Allow Insurers
to Continue Offering Canceled Plans (Nov. 14, 2013)
available at http://www.washingtonpost.com/politics/
transcript-white-house-background-briefing-on-planto-allow-insurers-to-continue-offering-canceled-plans/
2013/11/14/1c961e4e-4d59-11e3-ac54-aa84301ced81_
story.html (attached as Exh. 16).

App. 146a
b.

Unilateral Changes to Federal Statutes

89. First, on July 12, 2012, the Administration

claimed the authority to suspend the federally
mandated work requirement set forth in the Personal
Responsibility and Work Opportunity Reconciliation
Act of 1996, PL 104-193, Aug. 22, 1996. The statute
specifically provides that waivers shall not affect the
applicability of the mandatory work requirement. 42
U.S.C. 615(a)(2)(B). But the Administration notified
States of the HHS Secretarys willingness to exercise
her waiver authority to eliminate the laws work
participation requirement if the States meet a series of
agency-imposed requirements, such as creating a set of
performance measures. Office of Family Assistance,
TANF-ACF-IM-2012-03 (Guidance concerning waiver
and expenditure authority under Section 1115)
(July 12, 2012) available at http://www.acf.hhs.gov/
programs/ofa/resource/policy/im-ofa/2012/im201203/
im201203 (attached as Exh. 17).
90. Second, on
October
2, 2013, the
Administration finalized a rule that purported to grant
premium subsidies to congressional employees who
purchase health insurance through an appropriate
[Exchange] as determined by the Director of the Office
of Personnel Management. 5 C.F.R. 890.201(d). This
action plainly contradicts Section 1312(d)(3)(D) of the
ACA, which states: [T]he only health plans that the
Federal Government may make available to Members
of Congress and congressional staff . . . shall be health
plans that are created under this Act . . . or offered
through an Exchange established under this Act. 42

App. 147a
U.S.C. 18032(d)(3)(D). And under federal law,
premium subsidies are available to Members of
Congress and their staffs only through the Federal
Employees Health Benefits Program, not through the
ACAs Exchanges. See generally 5 U.S.C. 8901-8914.
No federal law permits large employers, including the
federal government, to subsidize employee coverage
purchased through an Exchange.
91. Third, on February 27, 2014, HHS
announced that due to technical issues, certain
Exchanges may deem individuals eligible for
retroactive federal subsidies to help offset the price of
insuranceeven if that insurance was purchased
outside of an Exchange. CMS, CMS Bulletin to
Marketplaces on Availability of Retroactive Advance
Payments of the PTC and CSRs in 2014 Due to
Exceptional Circumstances (Feb. 27, 2014) (attached
as Exh. 18). Yet the ACA clearly states that federal
subsidies shall be awarded only to those individuals
enrolled in an insurance plan through an Exchange.
26 U.S.C. 36B(b)(2)(a); 42 U.S.C. 18071(b)(1).
CLAIMS FOR RELIEF
COUNT ONE:
Violation of the Affordable Care Act and the
Administrative Procedure Act
92. The State of West Virginia incorporates by
reference the allegations of the preceding paragraphs.
93. All rules and executive actions must be
consistent with their authorizing statutes and cannot

App. 148a
be arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law. 5 U.S.C.
706(2)(A).
94. The Administrative Fix violates and is
contrary to the Affordable Care Act, and is arbitrary,
capricious, and an abuse of HHSs discretion. 42 U.S.C.
300gg300gg-6, 300gg-8.
95. The Act plainly states that if a State does not
enforce the eight federally mandated market
requirements, and the Secretary makes a finding of
that nonenforcement, the Secretary [of HHS] shall
enforce [the provisions of this part] insofar as they
relate to the issuance, sale, renewal, and offering of
health insurance coverage. 42 U.S.C. 300gg-22(a)(2)
(emphasis added). The Act does not provide HHS any
discretion (rulemaking or otherwise) to refuse
categorically to make a finding that the State has
failed to enforce the eight federal market
requirements, and thereby suspend the ACAs eight
federal market requirements or to convey
responsibility
for
these
federally
mandated
requirements to the States. See Massachusetts v. EPA.,
549 U.S. 497, 527, 534 (2007).
96. The case-by-case enforcement discretion
contemplated in Heckler v. Chaney, 470 U.S. 821 (1985),
is not applicable both because federal law provides
that HHS shall enforce the eight market conditions
where states decline to do so and because the
Administrative Fix is not a case-specific decision to
decline enforcement.

App. 149a
97. The State of West Virginia is therefore
entitled to relief under the APA and the Constitution
and laws of the United States.
COUNT TWO:
Violation of the Notice and Comment
Requirements of the Administrative
Procedure Act
98. The State of West Virginia incorporates by
reference the allegations of the preceding paragraphs.
99. The APA requires that all new or modified
legislative rules go through statutorily specified
notice-and-comment procedures. See Am. Min. Cong. v.
Mine Safety & Health Admin., 995 F.2d 1106, 1112
(D.C. Cir. 1993).
100. The APA provides that before an agency
promulgates a rule, it must provide a [g]eneral
notice of proposed rule-making and give interested
persons an opportunity to participate in the rulemaking through submission of written data, views, or
arguments. 5 U.S.C. 553(b)-(c). As part of the noticeand-comment process, an agency must respond to
relevant and significant public comments, Home
Box Office, Inc. v. FCC, 567 F.2d 9, 35 & n.58 (D.C. Cir.
1977), and to those comments which, if true, . . . would
require a change in [the] proposed rule, La. Fed. Land
Bank Assn v. Farm Credit Admin., 336 F.3d 1075, 1080
(D.C. Cir. 2003) (internal quotations and citations
omitted).

App. 150a
101. The notice-and-comment requirement is a
vital part of the APAs structure because it assures
that the agency will have before it the facts and
information relevant to a particular administrative
problem, as well as suggestions for alternative
solutions. Guardian Fed. Sav. & Loan Assn v. Fed.
Sav. & Loan Ins. Corp., 589 F.2d 658, 662 (D.C. Cir.
1978).
102. The Administrative Fix constitutes final
agency action that is binding on its face and in
application, and was thus subject to the APAs noticeand-comment procedures.
103. The Administrative Fix failed to comply
with the APAs notice and comment procedures.
104. The State of West Virginia is therefore
entitled to relief under 5 U.S.C. 702, 706(2)(A), (C),
(D).
COUNT THREE:
Unlawful Delegation of Executive
and Legislative Responsibility to the States
Art. I-II of the U.S. Constitution, ACA
105. The State of West Virginia incorporates by
reference the allegations of the preceding paragraphs.
106. The
Administrative
delegates
federal
executive
responsibility to the States.

Fix
and

unlawfully
legislative

107. First, Article II vests [t]he executive Power

. . . in a President of the United States of America,

App. 151a
who must himself take Care that the Laws be
faithfully executed. U.S. Const. art. II, 1, cl. 1; id., 3.
While subordinate federal officers may help him
execute the laws, the President may not convey his
responsibilities on non-federal entities with no
meaningful presidential control.
108. Second, Article I, 1 of the Constitution
vests [a]ll legislative Powers herein granted . . . in a
Congress of the United States. This provision
permits no delegation of [Congresss legislative]
powers. Whitman v. Am. Trucking Associations, 531
U.S. 457, 472 (2001). As a result, when decision-making
authority is conferred on a federal agency, there must
be an intelligible principle to which the person or body
authorized to [act] is directed to conform. J.W.
Hampton, Jr., & Co. v. United States, 276 U.S. 394, 409
(1928).
109. The Administrative Fix, however, leaves
entirely to the States discretion whether to enforce the
ACAs eight federal market requirements within their
respective borders. There is no principle limiting that
discretion.
110. Moreover, the Vesting Clause also prohibits
any delegation of regulatory power, whether or not
guided by an intelligible principle, to entities outside
of federal agencies. Any such entities must be limited
to an advisory or subordinate role in the [federal]
regulatory process. Assn of Am. Railroads v. U.S. Dept
of Transp., 721 F.3d 666, 671-73 (D.C. Cir. 2013), cert.

App. 152a
granted, 82 U.S.L.W. 3533 (U.S. June 23, 2014)
(No. 13-1080).
111. Under the Administrative Fix, however, the
States are not merely acting in a subordinate or
advisory role to federal regulators. They have
improperly been given regulatory power because HHS
has specifically provided that it will refuse to honor its
obligation to enforce the federally mandated
requirements where the States do not do so.
112. Third, under established principles of
statutory construction, federal agency officials . . .
may not subdelegate [any share in federal decisionmaking and enforcement authority] to outside
entitiesprivate or sovereignabsent affirmative
evidence of authority to do so. U.S. Telecom Assn v.
F.C.C., 359 F.3d 554, 566 (D.C. Cir. 2004). An agency
delegates its authority when it shifts to another party
the entire determination of whether a specific
statutory requirement . . . has been satisfied, id. at
567, or where the agency abdicates its final reviewing
authority, Natl Park & Conservation Assn v. Stanton,
54 F. Supp. 2d 7, 19 (D.D.C. 1999).
113. Far from providing such an express grant of
sub-delegation authority, the ACA creates a
cooperative federalism scheme, under which the
federal government alone has mandatory enforcement
authority if the States do not enforce the law.
114. Fourth, the separation of powers requires
all federal enforcement officials to be appointed by
federal processes and subject to removal by the

App. 153a
President. [A]nyone who exercis(es) significant
authority . . . or who performs a significant
governmental duty . . . pursuant to the laws of the
United States is an officer of the United States and
therefore must be appointed pursuant to the
Appointments Clause. Buckley v. Valeo, 424 U.S. 1
(1976) (per curiam); see U.S. Const. art. II, 2, cl. 2.
Likewise, the Constitution has been understood to
empower the President to keep [federal] officers
accountableby removing them from office, if
necessary. Free Enter. Fund v. Pub. Co. Accounting
Oversight Bd., 130 S. Ct. 3138, 3146 (2010).
115. The Administrative Fix, however, purports
to force States to exercise significant authority or
perform a significant federal governmental duty
pursuant to the laws of the United States without
being subject to federal appointment or removal.
116. The State of West Virginia is therefore
entitled to relief under the APA and the Constitution
and laws of the United States.
COUNT FOUR:
Violation of State Sovereignty
Under the Tenth Amendment
117. The State of West Virginia incorporates by
reference the allegations of the preceding paragraphs.
118. The Tenth Amendment prohibits federal
commandeering of States and their officials.

App. 154a
119. In New York v. United States, the Court
determined that [t]he Federal Government may not
compel the States to enact or administer a federal
regulatory program. 505 U.S. 144, 188 (1992). And in
Printz v. United States, the Court held that the federal
government cannot circumvent that prohibition by
conscripting the States officers directly. 521 U.S. 898,
935 (1997).
120. States are not mere political subdivisions
of the United States. State governments are neither
regional offices nor administrative agencies of the
Federal Government. The positions occupied by state
officials appear nowhere on the Federal Governments
most detailed organizational chart. New York, 505 U.S.
at 189.
121. The prohibition on commandeering applies
equally to the Executive Branch as it does to Congress.
See Printz, 521 U.S. at 925 (noting that the Federal
Government may not compel the States to implement,
by legislation or executive action, federal regulatory
programs).
122. The Administrative Fix runs afoul of the
Tenth Amendment because it is an attempt by the
Executive Branch to make States part of the federal
government. It confers on the States the sole authority
to determine the extent to which certain federal laws
will be enforced within their borders.
123. The Administrative Fix turns States into
federal policymakerswhich the federal government
has previously conceded constitutes unlawful

App. 155a
commandeering. See Printz, 521 U.S. at 927 (noting the
United Statess argument that the constitutional line
is crossed when Congress compels the States to make
law in their sovereign capacities).
124. Moreover, the Supreme Court has stressed
that the touchstone of the anti-commandeering
doctrine is whether the federal government has put
States in the position of taking the blame for [the
federal programs] burdensomeness and for its
defects. New York, 505 U.S. at 168; see also NFIB, 123
S. Ct. at 2602 (Permitting the Federal Government to
force the States to implement a federal program would
threaten the political accountability key to our federal
system.).
125. That is precisely the point of the
Administrative Fix: to shift political accountability for
the ACAs eight federally mandated market
requirements and their enforcement to the States.
126. The State of West Virginia is therefore
entitled to relief under the APA and the Constitution
and laws of the United States.
PRAYER FOR RELIEF
Wherefore, the State of West Virginia is [sic] asks
this Court to enter an order and judgment:
A. Declaring that the Administrative Fix is
unlawful because it: (1) was issued in violation of the
ACA and the APA; (2) was issued in violation of the
notice-and-comment requirements of the APA, 5 U.S.C.
701-706; (3) constitutes unlawful delegation of

App. 156a
federal executive and legislative responsibilities; and
(4) interferes with state sovereignty in violation of the
Tenth Amendment and broader constitutional
principles of federalism and dual sovereignty;
B. Remanding this case to HHS, to permit the
Administration promptly to work with Congress to
address the fact that the ACA rendered millions of
Americans health insurance plans unlawful, see, e.g.,
Rodway v. U.S. Dept. of Agriculture, 514 F.2d 809, 81318 (D.C. Cir. 1975);
C. Awarding the State costs and attorneys fees
pursuant to any applicable statute or authority; and
D. Awarding the State such additional relief,
including equitable injunctive relief, as the Court
deems appropriate.
Dated: July 29, 2014
Respectfully submitted,
Patrick Morrisey (DC Bar 459399)
Attorney General of West Virginia
s/ Elbert Lin
Elbert Lin (DC Bar 979723)
Solicitor General
Misha Tseytlin (DC Bar 991031)
Deputy Attorney General
Julie Marie Blake (DC Bar 998723)
Assistant Attorney General

App. 157a
Office of the Attorney General
State Capitol Building 1, Room E-26
Charleston, WV 25305
Telephone: (304) 558-2021
Fax: (304) 558-0140
E-mail: [email protected]
Counsel for Plaintiff
the State of West Virginia
Exhibit 3
[SEAL]
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503

November 14, 2013

(House)
STATEMENT OF ADMINISTRATION POLICY
H.R. 3350Keep Your Health Plan Act of 2013
(Rep. Upton, R-MI, and 161 cosponsors)
The Administration strongly opposes House passage of
H.R. 3350 because it threatens the health care security
of hard working, middle class families. The Nation is
experiencing the slowest growth in health spending in
the last 50 years. Since 2008, growth in private health
insurance spending stayed between three and four
percentsignificantly lower than earlier this decade
when growth reached almost 12 percent. With health
care costs rising at such low rates, this bill would be a
major step back.

App. 158a
H.R. 3350 rolls back the progress made by allowing
insurers to continue to sell new plans that deploy
practices such as not offering coverage for people with
pre-existing conditions, charging women more than
men, and continuing yearly caps on the amount of care
that enrollees receive. The Administration supports
policies that allow people to keep the health plans that
they have. But, policies that reverse the progress made
to extend quality, affordable coverage to millions of
uninsured, hardworking, middle class families are not
the solution. Rather than refighting old political
battles to sabotage the health care law, the Congress
should work with the Administration to improve the
law and move forward.
If the President were presented with H.R. 3350, he
would veto it.
*******

App. 159a
Exhibit 4
The White House
Office of the Press Secretary
For Immediate Release

November 14, 2013

Statement by the President on the

Affordable Care Act
James S. Brady Press Briefing Room
12:02 P.M. EST
THE PRESIDENT: Today I want to update the
American people on our efforts to implement and
improve the Affordable Care Act, and Ill take a couple
of your questions.
*

Now, switching gears, it has now been six weeks since

the Affordable Care Acts new marketplace has opened
for business. I think its fair to say that the rollout has
been rough so far. And I think everybody understands
that Im not happy about the fact that the rollout has
been wrought with a whole range of problems that Ive
been deeply concerned about. But today I want to talk
about what we know after these first few weeks and
what were doing to implement and improve the law.
Yesterday, the White House announced that in the first
month, more than 100,000 Americans successfully
enrolled in new insurance plans. Is that as high a
number as wed like? Absolutely not. But it does mean
that people want affordable health care. The problems

App. 160a
of the website have prevented too many Americans
from completing the enrollment process. And thats on
us, not on them. But there is no question that theres
real demand for quality, affordable health insurance.
In the first month, nearly a million people successfully
completed an application for themselves or their
families. Those applications represent more than 1.5
million people. Of those 1.5 million people, 106,000 of
them have successfully signed up to get covered.
Another 396,000 have the ability to gain access to
Medicaid under the Affordable Care Act. Thats been
less reported on, but it shouldnt be. Americans who
are having a difficult time, who are poor, many of them
working, may have a disability; theyre Americans like
everybody else, and the fact that they are now able to
get insurance is going to be critically important.
Later today, Ill be in Ohio, where Governor Kasich, a
Republican, has expanded Medicaid under the
Affordable Care Act. And as many as 275,000 Ohioans
will ultimately be better off because of it. And if every
governor followed suit, another 5.4 million Americans
could gain access to health care next year.
So bottom line is, in just one month, despite all the
problems that weve seen with the website, more than
500,000 Americans could know the security of health
care by January 1stmany of them for the first time
in their lives. And thats life-changing and its
significant.

App. 161a
That still leaves about 1 million Americans who
successfully made it through the website, and now
qualify to buy insurance, but havent picked a plan yet.
And theres no question that if the website were
working as its supposed to, that number would be
much higher of people who have actually enrolled. So
thats problem number onemaking sure that the
website works the way its supposed to. Its gotten a lot
better over the last few weeks than it was on the first
day, but were working 24/7 to get it working for the
vast majority of Americans in a smooth, consistent
way.
The other problem that has received a lot of attention
concerns Americans who have received letters from
their insurers that they may be losing the plans they
bought in the old individual market, often because
they no longer meet the laws requirements to cover
basic benefits like prescription drugs or doctors visits.
Now, as I indicated earlier, I completely get how
upsetting this can be for a lot of Americans,
particularly after assurances they heard from me that
if they had a plan that they liked, they could keep it.
And to those Americans, I hear you loud and clear. I
said that I would do everything we can to fix this
problem. And today Im offering an idea that will help
do it.
Already, people who have plans that predate the
Affordable Care Act can keep those plans if they
havent changed. That was already in the law. Thats
whats called a grandfather clause. It was included in

App. 162a
the law. Today, were going to extend that principle
both to people whose plans have changed since the law
took effect, and to people who bought plans since the
law took effect.
So state insurance commissioners still have the power
to decide what plans can and cant be sold in their
states. But the bottom line is, insurers can extend
current plans that would otherwise be canceled into
2014, and Americans whose plans have been canceled
can choose to re-enroll in the same kind of plan.
Were also requiring insurers to extend current plans
to inform their customers about two things. One, that
protectionswhat protections these renewed plans
dont include. And number two, that the marketplace
offers new options with better coverage and tax credits
that might help you bring down the cost.
So if youve received one of these letters, Id encourage
you to take a look at the marketplace. Even if the
website isnt working as smoothly as it should be for
everybody yet, the plan comparison tool that lets you
browse costs for new plans near you is working just
fine.
Now, this fix wont solve every problem for every
person. But its going to help a lot of people. Doing more
will require work with Congress. And Ive said from the
beginning, Im willing to work with Democrats and
Republicans to fix problems as they arise. This is an
example of what I was talking about. We can always
make this law work better.

App. 163a
It is important to understand, though, that the old
individual market was not working well. And its
important that we dont pretend that somehow thats
a place worth going back to. Too often, it works fine as
long as you stay healthy; it doesnt work well when
youre sick. So year after year, Americans were
routinely exposed to financial ruin, or denied coverage
due to minor preexisting conditions, or dropped from
coverage altogethereven if they paid their premiums
on time.
Thats one of the reasons we pursued this reform in the
first place. And thats why I will not accept proposals
that are just another brazen attempt to undermine or
repeal the overall law and drag us back into a broken
system. We will continue to make the case, even to
folks who choose to keep their own plans, that they
should shop around in the new marketplace because
theres a good chance that theyll be able to buy better
insurance at lower cost.
So were going to do everything we can to help the
Americans who have received these cancellation
notices. But I also want everybody to remember there
are still 40 million Americans who dont have health
insurance at all. Im not going to walk away from 40
million people who have the chance to get health
insurance for the first time. And Im not going to walk
away from something that has helped the cost of
health care grow at its slowest rate in 50 years.
So were at the opening weeks of the project to build a
better health care system for everybodya system

App. 164a
that will offer real financial security and peace of mind
to millions of Americans. It is a complex process. There
are all kinds of challenges. Im sure there will be
additional challenges that come up. And its important
that were honest and straightforward in terms of
when we come up with a problem with these reforms
and these laws, that we address them. But weve got to
move forward on this.
It took 100 years for us to even get to the point where
we could start talking about and implementing a law
to make sure everybody has got health insurance. And
my pledge to the American people is, is that were going
to solve the problems that are there, were going to get
it right, and the Affordable Care Act is going to work
for the American people.
So with that, Im going to take your questions, and Im
going to start with Julie Pace of AP.
Q Thank you, Mr. President. The combination of the
website problems and the concerns over the policy
cancellations has sparked a lot of worry within your
own party, and polls also show that youre taking some
hits with the public on both your overall job approval
rating and also on factors like trust and honesty. Do
you feel as though the flawed health care rollout has
led to a breach in the public trust and confidence in
government? And if so, how do you plan to resolve that?
THE PRESIDENT: There is no doubt that people are
frustrated. We just came out of a shutdown and the
possibility that for the first time in over 200 years, we
wouldnt pay our bills. And people breathed a sigh of

App. 165a
relief when that finally got done, and the next thing
they know is, is that the Presidents health care reform
cant get the website to work and that there are these
other problems with respect to cancellation notices.
And I understand why folks are frustrated. I would be,
too. Because sometimes people look at whats taking
place in Washington and they say, not enough is
getting done that helps me with my life. And
regardless of what Congress does, ultimately Im the
President of the United States and they expect me to
do something about it.
So in terms of how I intend to approach it, Im just
going to keep on working as hard as I can around the
priorities that the American people care about. And I
think its legitimate for them to expect me to have to
win back some credibility on this health care law in
particular, and on a whole range of these issues in
general.
And thats on me. I mean, we fumbled the rollout on
this health care law. There are a whole bunch of things
about it that are working really well which people
didnt notice because they werent controversialso
making sure kids could stay on their parents plans
until they werethrough the age of 25, and making
sure that seniors got more discounts on their
prescription drugs. There were a whole bunch of stuff
that we did well over the first three years.
But we always knew that these marketplaces, creating
a place where people can shop and through
competition get a better deal for the health insurance

App. 166a
that their families need, we always knew that that was
going to be complicated and everybody was going to be
paying a lot of attention to it. And we should have done
a better job getting that right on day onenot on day
28 or on day 40.
I am confident that by the time we look back on this
next year, that people are going to say this is working
well, and its helping a lot of people. But my intention
in terms of winning back the confidence of the
American people is just to work as hard as I can;
identify the problems that weve got, make sure that
were fixing them. Whether its a website, whether it is
making sure that folks who got these cancellation
notices get help, were just going to keep on chipping
away at this until the job is done.
Major Garrett.
Q Thank you, Mr. President. You said while the law
was being debated, if you like your plan, you can keep
it. You said after the law was implemented or signed,
if you like your plan, you can keep it. Americans
believed you, sir, when you said that to them over and
over. Do you not believe, sir, the American people
deserve a deeper, more transparent accountability
from you as to why you said that over and over when
your own statistic published in the Federal Register
alerted your policy staffand I presume youto the
fact that millions of Americans would, in fact, probably
fall into the very gap youre trying to administratively
fix now?

App. 167a
Thats one question. Second question. (Laughter.) You
were informed, or several people in this building were
informed two weeks before the launch of the website
that it was failing the most basic tests internally, and
yet a decision was made to launch the website on
October 1st. Did you, sir, make that test? And if so, did
you regret that?
THE PRESIDENT: Okay, on the website, I was not
informed directly that the website would not be
working the way it was supposed to. Had I been
informed, I wouldnt be going out saying, boy, this is
going to be great.
Im accused of a lot of things, but I dont think Im
stupid enough to go around saying, this is going to be
like shopping on Amazon or Travelocity a week before
the website opens if I thought that it wasnt going to
work. So clearly, we and I did not have enough
awareness about the problems in the website. Even a
week into it, the thinking was that these were some
glitches that would be fixed with patches, as opposed
to some broader systemic problems that took much
longer to fix and were still working on them.
So that doesnt excuse the fact that they just dont
work. But I think its fair to say that, no, Garrett
Major, we would not have rolled out something
knowing very well that it wasnt going to work the way
it was supposed, given all the scrutiny that we knew
was going to be on the website.
With respect to the pledge I made that if you like your
plan, you can keep it, I thinkand Ive said in

App. 168a
interviewshat there is no doubt that the way I put
that forward unequivocally ended up not being
accurate. It was not because of my intention not to
deliver on that commitment and that promise. We put
a grandfather clause into the law, but it was
insufficient.
Keep in mind that the individual market accounts for
5 percent of the population. So when I said you can
keep your health care, Im looking at folks whove got
employer-based health care; Im looking at folks whove
got Medicare and Medicaidand that accounts for the
vast majority of Americans. And then for people who
dont have any health insurance at all, obviously that
didnt apply. My commitment to them was, youre going
to be able to get affordable health care for the first
time.
You have an individual market that accounts for about
5 percent of the population. And our working
assumption wasmy working assumption was that
the majority of those folks would find better policies at
lower costs or the same costs in the marketplaces, and
that the universe of folks who potentially would not
find a better deal in the marketplaces, the grandfather
clause would work sufficiently for them. And it didnt.
And again, thats on us. Which is why werethats on
me. And thats why Im trying to fix it.
And as I said earlier, I guess last week, and I will
repeat, thats something I deeply regret because its
scary getting a cancellation notice.

App. 169a
Now, it is important to understand that out of that
population, typically there is constant churn in that
market. This market is not very stable and reliable for
people. So people have a lot of complaints when theyre
in that marketplace. As long as youre healthy, things
seem to be going pretty good. And so a lot of people
think, Ive got pretty good insuranceuntil they get
sickand then suddenly they look at the fine print,
and theyve got a $50,000 out-of-pocket expense that
they cant pay.
We know that on average over the last decade, each
year, premiums in that individual market would go up
an average of 15 percent a year. I know that because
when we were talking about health care reform, one of
the complaints was: I bought health care in the
individual market and I just got a notice from the
insurer, they dropped me after I had an illness; or my
premium skyrocketed by 20 or 30 percent, why arent
we doing something about this?
So part of what our goal has been is to make sure that
that individual market is stable and fair, and has the
kind of consumer protections that make sure that
people dont get a rude surprise when they really need
health insurance. But if you just got a cancellation
notice, and so far youre thinking, my prices are pretty
good, you havent been sick, and it fits your budget, and
now you get this noticeyoure going to be worried
about it. And if the insurer is saying the reason youre
getting this notice is because of the Affordable Care
Act, then youre going to be understandably
aggravated about it.

App. 170a
Now, for a big portion of those people, the truth is they
might have gotten a notice saying, were jacking up
your rates by 30 percent. They might have said, from
here on out, were not going to cover X, Y and Z
illnesses, were changing thebecause these were all
12-month policies. The insurance companies were
under no obligation to renew the exact same policies
that you had before.
But, look, one of the things I understood when we
decided to reform that health insurance market, part
of the reason why it hasnt been done before and its
very difficult to do, is that anything thats going on
thats tough in the health care market, if you initiated
a reform, can be attributed to your law. And so what we
want to do is to be able to say to these folks, you know
what, the Affordable Care Act is not going to be the
reason why insurers have to cancel your plan.
Now, what folks may find is the insurance companies
may still come back and say, we want to charge you 20
percent more than we did last year; or were not going
to cover prescription drugs now. But thats in the
nature of the market that existed earlier.
Q Did you decide, sir, that the simple declaration was
something the American people could handle, but this
nuanced answer you just gave now was something that
you couldnt handle and you didnt trust the American
people with a fuller truth?
THE PRESIDENT: No. I think, as I said earlier,
Major, my expectation was that for 98 percent of the
American people, either it genuinely wouldnt change

App. 171a
at all, or theyd be pleasantly surprised with the
options in the marketplace, and that the grandfather
clause would cover the rest.
That proved not to be the case. And thats on me. And
the American peoplethose who got cancellation
notices do deserve and have received an apology from
me. But they dont want just words. What they want is
whether we can make sure that they are in a better
place, and that we meet that commitment.
And, by the way, I think its very important for me to
note that there are a whole bunch of folks up in
Congress and others who made this statement, and
they were entirely sincere about it. And the fact that
youve got this percentage of people who have had this
impactI want them to know that their senator or
congressman, they were making representations based
on what I told them and what this White House and
our administrative staff told them. And so its not on
them. Its on us. But it is something that we intend to
fix.
*

Q Back to health care. Can you guarantee for the

American people that the health care website is going
to be fully operational for all people, not just the vast
majority, by November 30? And second, more broadly,
this is your signature domestic piece of legislation. You
hear criticism on the Hill that you and your White

App. 172a
House team are too insular. Is that how this mess came
to be?
THE PRESIDENT: Well, I think there is going to be
a lot of evaluation of how we got to this point. And I
assure you that Ive been asking a lot of questions
about that. The truth is that this is, number one, very
complicated. The website itself is doing a lot of stuff.
There arent a lot of websites out there that have to
help people compare their possible insurance options,
verify income to find out what kind of tax credits they
might get, communicate with those insurance
companies so they can purchase, make sure that all of
its verified. So theres just a bunch of pieces to it that
made it challenging.
And you combine that with the fact that the federal
government does a lot of things really well. One of the
things it does not do well is information technology
procurement. This is kind of a systematic problem that
we have across the board. And it is not surprising then
that there were going to be some problems.
Now, I think we have to ask ourselves some hard
questions inside the White House as opposed to why
we didnt see more of these problems coming earlier
onA, so we could set expectations; B, so that we could
look for different ways for people to end up applying.
So ultimately, youre right. This is something thats
really important to me, and its really important to
millions of Americans who have been waiting for a
really long time to try to get health care because they
dont have it. And I am very frustrated, but Im also

App. 173a
somebody who, if I fumbled the ball, Im going to wait
until I get the next play, and then Im going to try to
run as hard as I can and do right by the team. So
ultimately, Im the head of this team. We did fumble
the ball on it, and what Im going to do is make sure
that we get it fixed.
In terms of what happens on November 30th or
December 1st, I think its fair to say that the
improvement will be marked and noticeable. The
website will work much better on November 30th,
December 1st than it worked certainly on October 1st.
Thats a pretty low bar. It will be working a lot better
than it isit was last week, and it will be working
better than it was this week, which means that the
majority of people who go to the website will see a
website that is working the way its supposed to.
I think it is not possible for me to guarantee that 100
percent of the people 100 percent of the time going on
this website will have a perfectly seamless, smooth
experience. Were going to have to continue to improve
it even after November 30th, December 1st. But the
majority of people who use it will be able to see it
operate the way it was supposed to.
One thing that weve discovered, though, that I think
is worth noting: A lot of focus has been on the website
and the technology, and thats partly because thats
how we initially identified itthese are glitches. What
were discovering is that part of the problem has been
technologyhardware and softwareand thats being
upgraded. But even if we get the hardware and

App. 174a
software working exactly the way its supposed to with
relatively minor glitches, what were also discovering
is that insurance is complicated to buy.
And another mistake that we made I think was
underestimating the difficulties of people purchasing
insurance online and shopping for a lot of options with
a lot of costs and a lot of different benefits and plans,
and somehow expecting that that would be very
smooth. And then theyve also got to try [sic] apply for
tax credits on the website.
So what were doing even as were trying to solve the
technical problems is also what can we do to make the
application a little bit simpler; what can we do to make
it in English as opposed to bureaucratese; are there
steps that we can skip while still getting the core
information that people need[.]
And part of what were realizing is that they [sic] are
going to be a certain portion of people who are just
going to need more help and more handholding in the
application process. And so I guess part of the
continuous improvement that Im looking at is not just
a technical issue. Its also, can we streamline the
application process; what are we doing to give people
more assistance in the application process; how do the
call centers and the people who are helping folks inperson; how are they trained so that things can go
more smoothly.
Because the bottom line ultimately is, I just want
people to know what their options are in a clear way.
And buying health insurance is never going to be like

App. 175a
buying a song on iTunes. Its just a much more
complicated transaction. But I think we can continue
to make it betterall of which is to say that on
December 1st, November 30th, it will be a lot better,
but there will still be some problems. Some of those
will not be because of technological problems
although Im sure that there will still be some glitches
that have to be smoothed out. Some of its going to be
how are we making this application process more userfriendly for folks.
And one good example of this, by the way, just to use
an analogywhen we came into office, we heard a lot
of complaints about the financial aid forms that
families have to fill out to get federal financial aid. And
I actually remember applying for some of that stuff
and remember how difficult and confusing it was. And
Arne Duncan over at Education worked with a team to
see what we could do to simplify it, and it made a big
difference.
And thats part of the process that weve got to go
through. And in fact, if we can get some focus groups
and we sit down with actual users and see how well is
this working, what would improve it, what part of it
didnt you understandthat all I think is part of what
were going to be working on in the weeks ahead.
Q What about the insularity criticism that you hear
on the Hill?
THE PRESIDENT: Ive got to say I meet with an
awful lot of folks, and I talk to an awful lot of folks
every day. And I have lunches with CEOs and IT

App. 176a
venture capitalists and labor leaders and pretty much
folks from all walks of life on a whole bunch of topics.
And if you looked at my schedule on any given day,
were interacting with a whole lot of people.
And I think its fair to say that we have a pretty good
track record of working with folks on technology and
IT from our campaign where, both in 2008 and 2012,
we did a pretty darn good job on that. So its notthe
idea that somehow we didnt have access or were
interested in peoples ideas, I think isnt accurate.
What is true is that, as I said before, our IT systems,
how we purchase technology in the federal government
is cumbersome, complicated, and outdated.
And so this isnt a situation where on my campaign I
could simply say, who are the best folks out there; lets
get them around a table, lets figure out what were
doing, and were just going to continue to improve it
and refine it and work on our goals. If youre doing it
at the federal government level, youre going through
40 pages of specs and this and that and the other, and
there are all kinds of laws involved, and it makes it
more difficult. Its part of the reason why, chronically,
federal IT programs are over budget, behind schedule.
And one of thewhen I do some Monday morning
quarterbacking on myself, one of the things that I do
recognize issince I know that the federal government
has not been good at this stuff in the pasttwo years
ago, as we were thinking about this, we might have
done more to make sure that we were breaking the

App. 177a
mold on how we were going to be setting this up. But
that doesnt help us now. Weve got to move forward.
Jeff Mason.
Q Thank you, Mr. President. Todays fix that you just
announced leaves it up to state insurance
commissioners and insurance companies to ultimately
decide whether to allow old policies to be renewed for
a year. How confident are you that they will do that?
And secondly, how concerned are you that this flawed
rollout may hurt Democrats chances in next years
midterm elections, and your ability to advance other
priorities such as immigration reform?
THE
PRESIDENT: On
the
first
question,
traditionally, state insurance commissioners make
decisions about what plans can be or cannot be sold,
how they interact with insurers. What were
essentially saying is the Affordable Care Act is not
going to be the factor in what happens with folks in
the individual market. And my guess is right away
youre going to see a number of state insurance
commissioners exercise it.
Part of the challenge is the individual markets are
different in different states. There are some states that
have individual insurance markets that already have
almost all the consumer protections that the
Affordable Care Act does. They match up pretty good.
Its not some big jump for folks to move into the
marketplace. In others, theyre pretty low standards,
so you can sell pretty substandard plans in those

App. 178a
markets. And thats where people might see a bigger
jump in their premiums.
So I think theres going to be some state-by-state
evaluation on how this is handled. But the key point is,
is that it allows us to be able to say to the folks who
received these notices: Look, I, the President of the
United States and the insurancethat the insurance
model, the Affordable Care Act, is not going to be
getting in the way of you shopping in the individual
market that you used to have. As I said, there are still
going to be some folks who over time, I think, are going
to find that the marketplaces are better.
One way I described this toI met with a group of
senators when this issue first came up and its not a
perfect analogybut we made a decision as a society
that every car has to have a seatbelt or airbags. And so
you pass a regulation. And there are some additional
costs, particularly at the start of increasing the safety
and protections, but we make a decision as a society
that the costs are outweighed by the benefits of all the
lives that are saved. So what were saying now is if
youre buying a new car, you got to have a seatbelt.
Well, the problem with the grandfather clause that we
put in place is its almost like we said to folks, you got
to buy a new car, even if you cant afford it right now.
And sooner or later, folks are going to start trading in
their old cars. But we dont needif their life
circumstance is such where, for now at least, they want
to keep the old car, even if the new car is better, we

App. 179a
should be able to give them that option. And thats
what we want to do.
And, by the way, thats what we should have been able
to do in drafting the rules in the first place. So, again,
these are two fumbles on something thaton a big
game, whichbut the game is not over.
With respect to the politics of it, Ill let you guys do a
lot of the work on projecting what this means for
various political scenarios. There is no doubt that our
failure to roll out the ACA smoothly has put a burden
on Democrats, whether theyre running or not, because
they stood up and supported this effort through thick
and thin. And I feel deeply responsible for making it
harder for them rather than easier for them to
continue to promote the core values that I think led
them to support this thing in the first placewhich is,
in this country, as wealthy as we are, everybody should
be able to have the security of affordable health care.
And thats why I feel so strongly about fixing it.
My first and foremost obligation is the American
people, to make sure that they can get whats there
if we can just get the darn website working and smooth
this thing outwhich is plans that are affordable, and
allow them to take advantage of tax credits and give
them a better deal.
But I also do feel an obligation to everybody out there
who supported this effort. When we dont do a good job
on the rollout, were letting them down. And I dont like
doing that. So my commitment to them is, were going

App. 180a
to just keep on doing better every day until we get it
done.
And in terms of the impact on meI think to some
extent I addressed it when I talked to Juliethere are
going to be ups and downs during the course of my
presidency. And I think I said early on when I was
runningI am not a perfect man, and I will not be a
perfect President, but Ill wake up every single day
working as hard as I can on behalf of Americans out
there from every walk of life who are working hard,
meeting their responsibilities, but sometimes are
struggling because the way the system works isnt
giving them a fair shot.
And that pledge I havent broke. That commitment,
that promise, continues to becontinues to hold the
promise that I wouldnt be perfect, number one, but
also the promise that as long as Ive got the honor of
having this office, Im just going to work as hard as I
can to make things better for folks. And what that
means specifically in this health care arena is we cant
go back to the status quo.
I mean, right now everybody is properly focused on us
not doing a good job on the rollout, and thats
legitimate and I get it. There have been times where I
thought we were kind of slapped around a little bit
unjustly. This one is deserved. Right? Its on us.
But we cant lose sight of the fact that the status quo
before the Affordable Care Act was not working at all.
If the health care system had been working fine, and
everybody had high-quality health insurance at

App. 181a
affordable prices, I wouldnt have made it a priority; we
wouldnt have been fighting this hard to get it done
which is why, when I see sometimes folks up on Capitol
Hill, and Republicans in particular, who have been
suggesting repeal, repeal, lets get rid of this thing, I
keep on asking what is it that you want to do? Are you
suggesting that the status quo was working? Because
it wasnt, and everybody knows it. It wasnt working in
the individual market and it certainly wasnt working
for the 41 million people who didnt have health
insurance.
And so what we did was we chose a path that was the
least disruptive, to try to finally make sure that health
care is treated in this country like it is in every other
advanced countrythat its not some privilege that
just a certain portion of people can have, but its
something that everybody has some confidence about.
And we didnt go far left and choose an approach that
would have been much more disruptive. We didnt
adopt some more conservative proposals that would
have been much more disruptive. We tried to choose a
way that built off the existing system. But it is
complicated, it is hard, but I make no apologies for us
taking this onbecause somebody sooner or later had
to do it. I do make apologies for not having executed
better over the last several months.
Q And do you think that execution and the flaws in
the rollout will affect your ability to do other things,
like immigration reform and other policy priorities?

App. 182a
THE PRESIDENT: Well, look, if it comes to
immigration reform, there is no reason for us not to do
immigration reform. And weve already got strong
bipartisan support for immigration reform out of the
Senate. Youve gotI met with a number of
traditionally very conservative clergy who are deeply
committed to immigration reform. Weve got the
business community entirely behind immigration
reform. So youve got a bunch of constituencies that are
traditionally much morehave leaned much more
heavily towards the Republicans who are behind this.
So if people are looking for an excuse not to do the right
thing on immigration reform, they can always find an
excuseweve run out of time, or this is hard, or the
list goes on and on. But my working assumption is
people should want to do the right thing. And when
youve got an issue that would strengthen borders,
make sure that the legal immigration system works
the way its supposed to, that would go after employers
who have been doing the wrong thing when it comes to
hiring undocumented workers, and would allow folks
who are here illegally to get right with the law and pay
a fine, and learn English and get to the back of the line,
but ultimately join fully our American community
when youve got a law that makes sense, you shouldnt
be looking for an excuse not to do it. And Im going to
keep on pushing to make sure it gets done.
Am I going to have to do some work to rebuild
confidence around some of our initiatives? Yes. But
part of this job is the things that go right, you guys
arent going to write about; the things that go wrong

App. 183a
get prominent attention. Thats how it has always
been. Thats not unique to me as President. And Im up
to the challenge. Were going to get this done.
All right? Thank you, everybody.
END
12:53 P.M. EST

Exhibit 6
DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Center for Consumer Information & Insurance Oversight
200 Independence Avenue SW
Washington, DC 20201
[LOGO]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

November 14, 2013

Dear Insurance Commissioners,
Some individuals and small businesses with
health insurance coverage have been notified by their
health insurance issuers that their coverage will soon
be terminated. We understand that, in some cases, the
health insurance issuer is terminating or cancelling
such coverage because it would not comply with
certain market reforms that are scheduled to take
effect for plan or policy years starting on or after
January 1, 2014, such as the new modified community
rating and essential health benefits package

App. 184a
standards.1 Although affected individuals and small
businesses may access quality health insurance
coverage through the new Health Insurance
Marketplaces, in many cases with federal subsidies,
some of them are finding that such coverage would be
more expensive than their current coverage, and thus
they may be dissuaded from immediately transitioning
to such coverage.
In light of this circumstance, under the following
transitional policy, health insurance issuers may
choose to continue coverage that would otherwise be
terminated or cancelled, and affected individuals and
small businesses may choose to re-enroll in such
coverage. Under this transitional policy, health
insurance coverage in the individual or small group
market that is renewed for a policy year starting
between January 1, 2014, and October 1, 2014, and
associated group health plans of small businesses, will
not be considered to be out of compliance with the
market reforms specified below under the conditions
specified below.2 We will consider the impact of this
1
Health plans that are grandfathered pursuant to section
1251 of the Affordable Care Act and its implementing regulations
are not subject to most market reforms. Because there is no need
for transitional relief for such plans, the transitional relief
afforded in this document is not applicable to grandfathered
health plans.
2
The Department of Health and Human Services has
conferred with the Departments of Labor and the Treasury with
respect to those market reforms with respect to which there is
shared jurisdiction. With respect to those market reforms, the
Departments of Labor and the Treasury concur with the
transitional relief afforded in this document.

App. 185a
transitional policy in assessing whether to extend it
beyond the specified timeframe.
The specified market reforms are the portions of
the following provisions of the Public Health Service
Act that are scheduled to take effect for plan or policy
years starting on or after January 1, 2014, and any
corresponding portions of the Employee Retirement
Income Security Act (ERISA) and the Internal
Revenue Code (Code):

Section 2701 (relating to fair health insurance

premiums);

Section 2702 (relating

availability of coverage);

to

guaranteed

Section 2703 (relating

renewability of coverage);

to

guaranteed

Section 2704 (relating to the prohibition of

pre-existing condition exclusions or other
discrimination based on health status), with
respect to adults, except with respect to group
coverage;

Section 2705 (relating to the prohibition of

discrimination against individual participants
and beneficiaries based on health status),
except with respect to group coverage;3

Section 2706 (relating to non-discrimination

in health care);

We note that sections 702 of ERISA and 9802 of the Code

remain applicable to group health plans.

App. 186a

Section 2707 (relating to comprehensive

health insurance coverage);

Section 2709, as codified at 42 U.S.C. 300gg8 (relating to coverage for individuals

participating in approved clinical trials).

The specified conditions are the following:

The coverage was in effect on October 1,

2013;4

The health insurance issuer sends a notice to

all individuals and small businesses that
received a cancellation or termination notice
with respect to the coverage, or sends a notice
to all individuals and small businesses that
would otherwise receive a cancellation or
termination notice with respect to the
coverage, that informs them of (1) any
changes in the options that are available to
them; (2) which of the specified market
reforms would not be reflected in any
coverage that continues; (3) their potential
right to enroll in a qualified health plan
offered through a Health Insurance
Marketplace and possibly qualify for financial
assistance; (4) how to access such coverage
through a Marketplace; and (5) their right to
enroll in health insurance coverage outside of

In light of this condition, the transitional relief afforded in

this document is not applicable to newly obtained health
insurance coverage. It applies only with respect to individuals
and small businesses with coverage that was in effect on
October 1, 2013; it does not apply with respect to individuals and
small businesses that obtain new coverage after October 1, 2013.

App. 187a
a Marketplace that complies with the
specified market reforms. Where individuals
or small businesses have already received a
cancellation or termination notice, the issuer
must send this notice as soon as reasonably
possible. Where individuals or small business
would otherwise receive a cancellation or
termination notice, the issuer must send this
notice by the time that it would otherwise
send the cancellation or termination notice.
State agencies responsible for enforcing the
specified market reforms are encouraged to adopt the
same transitional policy with respect to this coverage.
Though this transitional policy was not
anticipated by health insurance issuers when setting
rates for 2014, the risk corridor program should help
ameliorate unanticipated changes in premium
revenue. We intend to explore ways to modify the risk
corridor program final rules to provide additional
assistance.
Sincerely,
/Signed, GC, November 14, 2013/
Gary Cohen
Director
Center for Consumer Information and
Insurance Oversight

App. 188a
Exhibit 8
DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Center for Consumer Information & Insurance Oversight
200 Independence Avenue SW
Washington, DC 20201
[LOGO]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: March 5, 2014

From: Gary Cohen, Director, Center for Consumer
Information and Insurance Oversight
Title: Insurance Standards Bulletin Series
Extension of Transitional Policy through October 1,
2016
Subject: Extended Transition to Affordable Care
Act-Compliant Policies
On November 14, 2013, the Centers for Medicare &
Medicaid Services (CMS) issued a letter to the State
Insurance Commissioners outlining a transitional
policy for non-grandfathered coverage in the small
group and individual health insurance markets. CMS
announced in its November 14, 2013 letter that, if
permitted by applicable State authorities, health
insurance issuers may choose to continue certain
coverage that would otherwise be cancelled, and
affected individuals and small businesses may choose
to re-enroll in such coverage. CMS further stated that,
under the transitional policy, non-grandfathered
health insurance coverage in the individual or small
group market that is renewed for a policy year starting
between January 1, 2014 and October 1, 2014 will not

App. 189a
be considered to be out of compliance with certain
market reforms if certain specific conditions are met.
As provided in the November 14, 2013 letter, policies
subject to the transitional relief are not considered to
be out of compliance with the following provisions of
the Public Health Service Act (PHS Act):

Section 2701 (relating to fair health insurance

premiums);

Section 2702 (relating

availability of coverage);

to

guaranteed

Section 2703 (relating

renewability of coverage);

to

guaranteed

Section 2704 (relating to the prohibition of

pre-existing condition exclusions or other
discrimination based on health status), with
respect to adults, except with respect to group
coverage;

Section 2705 (relating to the prohibition of

discrimination against individual participants
and beneficiaries based on health status),
except with respect to group coverage;1

Section 2706 (relating to non-discrimination

in health care);

Section 2707 (relating to comprehensive

health insurance coverage);

We note that sections 702 of ERISA and 9802 of the Code

remain applicable to group health plan coverage.

App. 190a

Section 2709, as codified at 42 U.S.C. 300gg8 (relating to coverage for individuals

participating in approved clinical trials);

Additionally, policies subject to the transitional relief

are not considered to be out of compliance with section
1312(c) of the Affordable Care Act (relating to the
single risk pool requirement). As a reminder, issuers
can choose to adopt one or all of these provisions in
their renewed policies.
CMS indicated in its November 14, 2013 letter that it
would consider the impact of this transitional policy in
assessing whether to extend it beyond the specified
timeframe. We have considered the impact of the
transitional policy and will extend our transitional
policy for two yearsto policy years beginning on or
before October 1, 2016, in the small group and
individual markets. We will consider the impact of the
two-year extension of the transitional policy in
assessing whether an additional one-year extension is
appropriate.
This policy also applies to large businesses that
currently purchase insurance in the large group
market but that, as of January 1, 2016, will be
redefined by section 1304(b) of the Affordable Care Act
as small businesses purchasing insurance in the small
group market. At the option of the States and health
insurance issuers, they, too, will have the option of
renewing their current policies through policy years
beginning on or before October 1, 2016, without their
policies being considered to be out of compliance with

App. 191a
the provisions specified above that apply to the small
group market but not to the large group market.
At the option of the States, health insurance issuers
that have issued or will issue a policy under the
transitional policy anytime in 2014 may renew such
policies at any time through October 1, 2016, and
affected individuals and small businesses may choose
to re-enroll in such coverage through October 1, 2016.
States that did not adopt the November 14, 2013
transitional policy, and that regulate issuers whose
2013 policies renew anytime between the date of
issuance of this bulletin and December 31, 2014,
including any policies that they allowed to be renewed
early in late 2013, may choose to implement the
transitional policy for any remaining portion of the
2014 policy year (i.e., this policy could apply to early
renewals from late 2013). Moreover, States can elect
to extend the transitional policy for a shorter period
than through October 1, 2016 (but may not extend it to
policy years beginning after October 1, 2016).
Furthermore, States may choose to adopt both the
November 14, 2013 transitional policy as well as the
extended transitional policy through October 1, 2016,
or adopt one but not the other, in the following manner:

For both the individual and the small group

markets;

For the individual market only; or

For the small group market only.

App. 192a

A State may also choose to adopt the

transitional relief policy only for large
businesses that currently purchase insurance
in the large group market but that, for policy
years beginning on or after January 1, 2016,
will be redefined as small businesses
purchasing insurance in the small group
market.

Under the extended transitional policy, health

insurance coverage in the individual or small group
market that meets the criteria of the extended
transitional policy through October 1, 2016, and
associated group health plans of small businesses, as
applicable, will not be considered to be out of
compliance with the market reforms as specified
above. Health insurance issuers that renew coverage
under this extended transitional policy through
October 1, 2016, must, for each policy year, provide the
relevant attached notice to affected individuals and
small businesses as specified in our November 14, 2013
guidance.2
All transitional policies that have rate increases
subject to review under PHS Act section 2794 should
utilize the rules and processes for submission to States
and CMS that were in place prior to April 1, 2013, to
assure compliance with PHS Act section 2794
requirements.

Because these are required standard notices that cannot be

modified, the Paperwork Reduction Act does not apply to these
notices.

App. 193a
On December 19, 2013, CMS issued guidance
indicating that individuals whose policies are
cancelled because the coverage is not compliant with
the Affordable Care Act qualify for a hardship
exemption if they find other options to be more
expensive, and are able to purchase catastrophic
coverage.3 This hardship exemption will continue to be
available until October 1, 2016, for those individuals
whose noncompliant coverage is cancelled and who
meet the requirements specified in the guidance.
Where to get more information:
If you have any questions regarding this guidance,
please e-mail CCIIO at [email protected].
Attachment 1
This notice must be used when a cancellation
notice has already been sent and the issuer is
providing an option to the policyholder to
continue the existing coverage:
Dear Policyholder,
We previously notified you that your current policy is
being cancelled because it does not meet the minimum
standards required by the Affordable Care Act. We are
now writing to inform you that, consistent with federal
guidance initially announced in November 2013, and
3

The December 19, 2013 guidance can be found here:

http://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/
Downloads/cancellation-consumer-options-12-19-2013.pdf.

App. 194a
extended in February 2014, you may keep this
coverage for the upcoming policy year.
How Do I Keep My Current Policy?
To keep your current policy, please contact us.
As you think about your options, there are some things
to keep in mind. If you choose to renew your current
policy, it may NOT provide all of the protections of the
Affordable Care Act. These include one or more of the
following new protections of the Public Health Service
Act (PHS Act) that were added by the health care law
and took effect for coverage beginning in 2014. If you
choose to renew your current policy, your coverage:

May not meet standards for fair health

insurance premiums, so you might be charged
more based on factors such as gender or a preexisting medical condition, and it might not
comply with rules limiting the ability to
charge older people more than younger people
(PHS Act section 2701).

May not meet standards for guaranteed

availability, so it might exclude consumers
based on factors such as a pre-existing
medical condition (PHS Act section 2702).

May not meet standards for guaranteed

renewability (PHS Act section 2703).

If the coverage is an individual market

policy, may not meet standards related to preexisting medical conditions for adults, so it
might exclude coverage for treatment of an

App. 195a
adults pre-existing medical condition such as
diabetes or cancer (PHS Act section 2704).

If the coverage is an individual market policy,

may not meet standards related to
discrimination based on health status (PHS
Act section 2705).

May not meet standards for nondiscrimination with respect to health care
providers (PHS Act section 2706).

May not cover essential health benefits or

limit annual out-of-pocket spending, so it
might not cover benefits such as prescription
drugs or maternity care, or might have
unlimited cost-sharing (PHS Act section
2707).

May not meet standards for participation in

clinical trials, so you might not have coverage
for services related to a clinical trial for a lifethreatening or other serious disease (PHS Act
section 2709).

How Do I Choose A Different Policy?

You have options for getting quality health insurance.
[You may shop in the Health Insurance Marketplace,
where all policies meet certain standards to help
guarantee health care security, and no one who is
qualified to purchase coverage through the
Marketplace can be turned away or charged more
because of a pre-existing medical condition. The
Marketplace allows you to choose a private policy that
fits your budget and health care needs. You may

App. 196a
qualify for tax credits or other federal financial
assistance to help you afford health insurance
coverage purchased through the Marketplace.]4
[You can also get new health insurance outside the
Marketplace.] All new policies guarantee certain
protections, such as your ability to buy a policy even if
you have a pre-existing medical condition. [However,
federal financial assistance is not available outside the
Marketplace.]
You should review your options as soon as possible,
because you may have to buy your coverage within a
limited time period.
How Can I Learn More?
To learn more about the Health Insurance
Marketplace and protections under the health care
law, visit HealthCare.gov or call 1-800-318-2596 or
TTY: 1-855-889-4325.
If you have questions, please contact us.
Attachment 2
This notice must be used when a cancellation
notice has not yet been sent and the issuer is
providing an option to the policyholder to
continue the existing coverage:

The bracket language does not apply to the U.S. territories

that do not have a Marketplace.

App. 197a
Dear Policyholder,
We are writing to inform you that, consistent with
federal guidance initially announced in November
2013 and extended in February 2014, you may keep
your existing coverage for the upcoming policy year.
How Do I Keep My Current Policy?
To keep your current policy, please contact us.
As you think about your options, there are some things
to keep in mind. If you choose to renew your current
policy, it may NOT provide all of the protections of the
Affordable Care Act. These include one or more of the
following new protections of the Public Health Service
Act (PHS Act) that were added by the health care law
and took effect for coverage beginning in 2014. If you
choose to renew your current policy, your coverage:

May not meet standards for fair health

insurance premiums, so you might be charged
more based on factors such as gender or a preexisting medical condition, and it might not
comply with rules limiting the ability to
charge older people more than younger people
(PHS Act section 2701).

May not meet standards for guaranteed

availability, so it might exclude consumers
based on factors such as a pre-existing
medical condition (PHS Act section 2702).

May not meet standards for guaranteed

renewability (PHS Act section 2703).

App. 198a

If the coverage is an individual market policy,

may not meet standards related to preexisting medical conditions for adults, so it
might exclude coverage for treatment of an
adults pre-existing medical condition such as
diabetes or cancer (PHS Act section 2704).

If the coverage is an individual market policy,

may not meet standards related to
discrimination based on health status (PHS
Act section 2705).

May not meet standards for nondiscrimination with respect to health care
providers (PHS Act section 2706).

May not cover essential health benefits or

limit annual out-of-pocket spending, so it
might not cover benefits such as prescription
drugs or maternity care, or might have
unlimited cost sharing (PHS Act section
2707).

May not meet standards for participation in

clinical trials, so you might not have coverage
for services related to a clinical trial for a lifethreatening or other serious disease (PHS Act
section 2709).

How Do I Choose A Different Policy?

You have options for getting quality health insurance.
[You may shop in the Health Insurance Marketplace,
where all policies meet certain standards to help
guarantee health care security, and no one who is
qualified to purchase coverage through the
Marketplace can be turned away or charged more

App. 199a
because of a pre-existing medical condition. The
Marketplace allows you to choose a private policy that
fits your budget and health care needs. You may
qualify for tax credits or other federal financial
assistance to help you afford health insurance
coverage purchased through the Marketplace.]5
[You can also get new health insurance outside the
Marketplace.] All new policies guarantee certain
protections, such as your ability to buy a policy even if
you have a pre-existing medical condition. [However,
federal financial assistance is not available outside the
Marketplace.]
You should review your options as soon as possible,
because you may have to buy your coverage within a
limited time period.
How Can I Learn More?
To learn more about the Health Insurance
Marketplace and protections under the health care
law, visit HealthCare.gov or call 1-800-318-2596 or
TTY: 1-855-889-4325.
If you have questions, please contact us.

The bracket language does not apply to the U.S. territories

that do not have a Marketplace.

App. 200a
Exhibit 13
PRESS RELEASE
For Immediate Release
Contact: Jason L. Butcher
November 21, 2013
Public Information Specialist
304-558-6279 x1237
West Virginia Makes Announcement
on CCIIO Re-enrollment Proposal
CHARLESTON, W.Va.Insurance Commissioner
Mike Riley announced today that West Virginia will not
adopt the Center for Consumer Information and
Insurance Oversights (CCIIO) single-year reenrollment proposal because the proactive steps taken
in 2013 by our insurance marketplace have effectively
mitigated the transition concerns expressed by
President Barack Obama.
West Virginia insurance carriers were given the option
to permit early renewal for 2013 policyholders to
extend current polices through all of 2014. Further
extension of existing policies cannot guarantee that
the policyholders will not see a rate increase for the
policy year starting January 1, 2014.
The abrupt CCIIO proposal comes at a time when
West Virginia employers, citizens and insurance
carriers have already made extensive changes to
comply with the new law, said Commissioner Riley.
In order to avoid further confusion, provide market
stability, mitigate potential rate impacts of the CCIIO
proposal, and regulate the West Virginia insurance
market in accordance with the existing law, we have

App. 201a
decided to maintain our current direction, Riley
continued. After completing our analysis, we
concluded that our insurance marketplace and
policyholders were given a transition period that is
consistent with the existing law. We will continue to
monitor any future developments to ensure we protect
the interest of West Virginias citizens.
If consumers have questions about obtaining health
insurance coverage or the Affordable Care Act, they
may visit their county DHHR office or local Bureau of
Senior Services Office to speak with an In-Person
Assister, contact the Consumer Services Division of the
West Virginia Offices of the Insurance Commissioner
at 1.888.879.9842 or visit the local help section on the
www.healthcare.gov website.

Exhibit 14
NewsRoom
4/20/14 Charleston Gazette & Daily Mail (WV) 1A
2014 WLNR 10711115
Sunday Gazette-Mail (Charleston, WV)
Copyright (c) 2014 Charleston Newspapers
April 20, 2014
AFFORDABLE CARE ACT
Non-compliant insurance plans get 3-year stay
Lydia Nuzum; Staff writer
West Virginians who enrolled in health insurance
plans incompatible with the Affordable Care Act before

App. 202a
its onset will now have three more years to choose a
new plan, according to the states insurance chief.
West Virginia Insurance Commissioner Mike Riley
said Gov. Earl Ray Tomblin made the decision to
extend the allowable period for ACA non-compliant
plans on April 10. On March 5, the federal government
decided to allow those with noncompliant plans to keep
them through October 2017 if their states and
insurance companies allow it.
The decision likely will impact only a small portion of
the population enrolled in the small-group
marketplace. According to Riley, the governor based
his decision on feedback from various insurers who
indicated that some of their customers had renewed
non-compliant plans through 2014, the previous
deadline for switching to an ACA compliant plan.
Its up to the carriers as to whether they want to offer
non-compliant plans through that much longer period,
Riley said. It seemed like a necessary decision. The
original decision had placed the deadline at the end of
2014, but our carriers had reported to us that they had
already offered some policyholders plans that they
would retain through 2014. This was the best way to
address it.
Fred Earley, president of Highmark West Virginia, said
his company has not decided yet whether it will extend
non-compliant coverage to its small group customers.
Highmark, the largest insurance company in the state,
was the only company to opt into West Virginias ACA
insurance marketplace.

App. 203a
The Affordable Care Act has resulted in a good bit of
disruption in the way small-group plans function, he
said. In terms of the way we had rated the small group
system, really for the last 20 yearswhich worked
very wellthe inclusion of the ACA changed that
significantly. For some groups, it was better; for other
groups, it was worse.
Earley said one of his concerns about allowing an
extension is the effect it will have on Highmarks risk
pool for its small-group plans. A risk pool is a system
of risk management that allows insurance companies
to group customers together in order to lessen the costs
of paying claims.
Allowing this additional transition period is
fracturing the small group risk market, Earley said.
Some will be allowed to purchase a new product, and
some will be allowed to continue on their noncompliant product. Whenever a risk pool is broken into
smaller pieces, it will have adverse effects, so were still
working on trying to balance that out.
David Mathieu, vice president of marketing and
underwriting for The Health Plan of the Upper Ohio
Valley, West Virginias second-largest insurer, said his
agency had opted into the extension. Mathieu
estimated that The Health Plan insures roughly 5,000
people in the small-group marketplace, and said the
company felt extending coverage would be the best
decision to help some of those customers.
We have been permitted to offer these non-compliant
plans through 2017, Mathieu said. Unfortunately,

App. 204a
there was a period of a few months where some
customers chose a plan, and whats going to be
confusing is that those customers who chose
noncompliant plans during that time will have to stay
on those plans [through 2014], while the other half,
who have anniversary dates between July and
December, have the opportunity to sign up for the plan
we now have. Half of our folks will be compliant, and
half will be non-compliant.
Brandon Merritt, a health- policy analyst for the West
Virginia Center on Budget and Policy, said the decision
impacts a small segment of the states population. He
said roughly 55 percent of those insured through the
state receive their insurance through a large employer
or through PEIA, and more than 30 percent receive
public insurance, such as Medicaid or Medicare.
All in all, this makes me feel like this wont have a
huge impact on the way the ACA is implemented,
Merritt said. It shouldnt impact the implementation
in West Virginia much, because we have one of the
smallest individual markets in the country.
Reach Lydia Nuzum at [email protected]
or 304-348-5189.

App. 205a
[SEAL]

U.S. Department of Justice

Civil Division, Appellate Staff
950 Pennsylvania Ave. NW, Rm. 7235
Washington, DC 20530

145-16-7416
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Tel: (202) 616-5372

March 2, 2016
Mr. Mark J. Langer, Clerk
U.S. Court of Appeals for the D.C. Circuit
333 Constitution Ave., NW, Room 5523
Washington, DC 20001
Re: West Virginia ex rel. Patrick Morrisey v. U.S.
Department of Health & Human Services,
No. 15-5309 (oral argument scheduled for
April 15, 2016)
Dear Mr. Langer:
The above-captioned case presents the question
whether West Virginia has standing to challenge a
policy announced by the Secretary of Health and
Human Services (HHS) in November 2013 stating that
HHS will not consider health insurance issuers of
certain policies to be out of compliance with certain
requirements of the Patient Protection and Affordable
Care Act during a specified transition period. The
government submits this letter to inform the Court
that on February 29, 2016, HHS announced that it
would extend the transition period so that this
transitional enforcement policy now applies to eligible
coverage that is renewed for a policy year beginning on

App. 206a
or before October 1, 2017, provided that all policies end
by December 31, 2017. The bulletin issued by the
Centers for Medicare & Medicaid Services is available
at https://www.cms.gov/CCIIO/Resources/Regulationsand-Guidance/Downloads/final-transition-bulletin-2-2916.pdf.
Sincerely,
s/ Lindsey Powell
LINDSEY POWELL
cc: All counsel by ECF

App. 207a
DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
Center for Consumer Information & Insurance Oversight
200 Independence Avenue SW
Washington, DC 20201
[LOGO]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date:

February 29, 2016

From:

Kevin Counihan, Director, Center for

Consumer Information and Insurance
Oversight

Title:

Insurance Standards Bulletin Series

INFORMATIONExtension of
Transitional Policy through Calendar
Year 2017

Subject: Extended Transition to Affordable Care

Act-Compliant Policies
I.

Purpose

On November 14, 2013, the Centers for Medicare &

Medicaid Services (CMS) issued a letter to the State
Insurance Commissioners outlining a transitional
policy for non-grandfathered coverage in the small
group and individual health insurance markets. CMS
announced in its November 14, 2013 letter that, if
permitted by applicable State authorities, health
insurance issuers may choose to continue certain
coverage that would otherwise be cancelled, and
affected individuals and small businesses may choose
to re-enroll in such coverage. CMS further stated that,
under the transitional policy, non-grandfathered
health insurance coverage in the individual or small
group market that is renewed for a policy year starting

App. 208a
between January 1, 2014 and October 1, 2014 will not
be considered to be out of compliance with certain
market reforms if certain specific conditions are met.
On March 5, 2014, CMS extended the transitional
policy for two yearsto policy years beginning on or
before October 1, 2016in the small group and
individual markets.
As provided in the November 14, 2013 and March 5,
2014 guidance, policies subject to the transitional relief
are not considered to be out of compliance with the
following provisions of the Public Health Service Act
(PHS Act):

Section 2701 (relating to fair health insurance

premiums);

Section 2702 (relating

availability of coverage);

to

guaranteed

Section 2703 (relating

renewability of coverage);

to

guaranteed

Section 2704 (relating to the prohibition of

pre-existing condition exclusions or other
discrimination based on health status), with
respect to adults, except with respect to group
coverage;

Section 2705 (relating to the prohibition of

discrimination against individual participants
and beneficiaries based on health status),
except with respect to group coverage;1

We note that sections 702 of ERISA and 9802 of the Code

remain applicable to group health plan coverage.

App. 209a

Section 2706 (relating to non-discrimination

in health care);

Section 2707 (relating to comprehensive

health insurance coverage);

Section 2709, as codified at 42 U.S.C. 300gg8 (relating to coverage for individuals

participating in approved clinical trials);

Additionally, policies subject to the transitional relief

are not considered to be out of compliance with section
1312(c) of the Affordable Care Act (relating to the
single risk pool requirement). As a reminder, issuers
can choose to adopt one or all of these provisions in
their renewed policies.
CMS indicated in its March 5, 2014 guidance that it
would consider the impact of the two-year extension of
the transitional policy in assessing whether an
additional one-year extension is appropriate.
II.

Guidance

We are committed to smoothly bringing all nongrandfathered coverage in the individual and small
group markets into compliance with all applicable
PHS Act sections, including those relating to single
risk pools, no later than 2018. Therefore, we will
extend our transitional policy to policy years beginning
on or before October 1, 2017, provided that all policies
end by December 31, 2017. Specifically, States may
permit issuers that have renewed policies under the
transitional policy continually since 2014 to renew
such coverage for a policy year starting on or before

App. 210a
October 1, 2017; however, any policies renewed
under this transitional policy must not extend past
December 31, 2017. We will work with issuers and
States to implement this policy, including options such
as allowing policy years that are shorter than 12
months or early renewals with a January 1, 2017 start
date. This approach will facilitate smooth transitions
from transitional coverage to Affordable Care Actcompliant coverage, which requires a calendar year
policy year in the individual market.
States can elect to extend the transitional policy for
shorter periods than outlined above (but may not
extend it beyond these periods).2 Furthermore, States
may choose to adopt the extended transitional policy
in the following manner:

For both the individual and the small group

markets;

For the individual market only; or

For the small group market only.

Under the extended transitional policy, health

insurance coverage in the individual or small group
market that meets the criteria of the extended
transitional policy and associated group health plans
2

Following enactment of the Protecting Affordable Coverage

for Employees Act (Pub. L. 114-60), the transitional policy in the
March 5, 2014 guidance for certain eligible large employers no
longer applies. However, States that elect to expand the definition
of small employer to 1-100 employees may, under State law
authority, choose to provide transition relief to these employers,
as appropriate.

App. 211a
of small businesses, as applicable, will not be
considered to be out of compliance with the market
reforms as specified above. Health insurance issuers
that renew coverage under this extended transitional
policy, must, for each policy year, provide the relevant
attached notice to affected individuals and small
businesses as specified in our November 14, 2013 and
March 5, 2014 guidance.3
All transitional policies that have rate increases
subject to review under PHS Act section 2794 should
use the rules and processes for submission to States
and CMS that were in place prior to April 1, 2013, and
updated April 1, 2015,4 to assure compliance with PHS
Act section 2794 requirements.
III. Where to get more information
If you have any questions regarding this guidance,
please e-mail CCIIO at [email protected].

Attachment 1
This notice must be used when a cancellation
notice has already been sent and the issuer is

3
Because these are required standard notices that cannot be
modified, the Paperwork Reduction Act does not apply to these
notices.
4
See CMS Rate Review Justification Instructions for
Transitional Policies and Student Health Plans (April 1, 2015),
available at https://www.cms.gov/CCIIO/Resources/Forms-Reportsand-Other-Resources/Downloads/RRJ-Instructions-Manual20150401-Final.pdf.

App. 212a
providing an option to the policyholder to
continue the existing coverage:
Dear Policyholder,
We previously notified you that your current policy is
being cancelled because it does not meet the minimum
standards required by the Affordable Care Act. We are
now writing to inform you that, consistent with federal
guidance initially announced in November 2013, and
extended in March 2014, you may keep this coverage
for the upcoming policy year.
How Do I Keep My Current Policy?
To keep your current policy, please contact us.
As you think about your options, there are some things
to keep in mind. If you choose to renew your current
policy, it may NOT provide all of the protections of the
Affordable Care Act. These include one or more of the
following new protections of the Public Health Service
Act (PHS Act) that were added by the health care law
and took effect for coverage beginning in 2014. If you
choose to renew your current policy, your coverage:
May not meet standards for fair health insurance
premiums, so you might be charged more based on
factors such as gender or a pre-existing medical
condition, and it might not comply with rules limiting
the ability to charge older people more than younger
people (PHS Act section 2701).
May not meet standards for guaranteed
availability, so it might exclude consumers based on

App. 213a
factors such as a pre-existing medical condition (PHS
Act section 2702).
May not meet standards for
renewability (PHS Act section 2703).

guaranteed

If the coverage is an individual market policy, may

not meet standards related to pre-existing medical
conditions for adults, so it might exclude coverage for
treatment of an adults pre-existing medical condition
such as diabetes or cancer (PHS Act section 2704).
If the coverage is an individual market policy, may
not meet standards related to discrimination based on
health status (PHS Act section 2705).
May not meet standards for non-discrimination
with respect to health care providers (PHS Act section
2706).
May not cover essential health benefits or limit
annual out-of-pocket spending, so it might not cover
benefits such as prescription drugs or maternity care,
or might have unlimited cost-sharing (PHS Act section
2707).
May not meet standards for participation in clinical
trials, so you might not have coverage for services
related to a clinical trial for a life-threatening or other
serious disease (PHS Act section 2709).
How Do I Choose A Different Policy?
You have options for getting quality health insurance.
[You may shop in the Health Insurance Marketplace,
where all policies meet certain standards to help

App. 214a
guarantee health care security, and no one who is
qualified to purchase coverage through the
Marketplace can be turned away or charged more
because of a pre-existing medical condition. The
Marketplace allows you to choose a private policy that
fits your budget and health care needs. You may
qualify for tax credits or other federal financial
assistance to help you afford health insurance
coverage purchased through the Marketplace.]5
[You can also get new health insurance outside the
Marketplace.] All new policies guarantee certain
protections, such as your ability to buy a policy even if
you have a pre-existing medical condition. [However,
federal financial assistance is not available outside the
Marketplace.]
You should review your options as soon as possible,
because you may have to buy your coverage within a
limited time period.
How Can I Learn More?
To learn more about the Health Insurance
Marketplace and protections under the health care
law, visit HealthCare.gov or call 1-800-318-2596 or
TTY: 1-855-889-4325.
If you have questions, please contact us.

The bracket language does not apply to the U.S. territories

that do not have a Marketplace.

App. 215a
Attachment 2
This notice must be used when a cancellation
notice has not yet been sent and the issuer is
providing an option to the policyholder to
continue the existing coverage:
Dear Policyholder,
We are writing to inform you that, consistent with
federal guidance initially announced in November
2013 and extended in March 2014, you may keep your
existing coverage for the upcoming policy year.
How Do I Keep My Current Policy?
To keep your current policy, please contact us.
As you think about your options, there are some things
to keep in mind. If you choose to renew your current
policy, it may NOT provide all of the protections of the
Affordable Care Act. These include one or more of the
following new protections of the Public Health Service
Act (PHS Act) that were added by the health care law
and took effect for coverage beginning in 2014. If you
choose to renew your current policy, your coverage:
May not meet standards for fair health insurance
premiums, so you might be charged more based on
factors such as gender or a pre-existing medical
condition, and it might not comply with rules limiting
the ability to charge older people more than younger
people (PHS Act section 2701).
May not meet standards for guaranteed
availability, so it might exclude consumers based on

App. 216a
factors such as a pre-existing medical condition (PHS
Act section 2702).
May not meet standards for
renewability (PHS Act section 2703).

guaranteed

If the coverage is an individual market policy, may

not meet standards related to pre-existing medical
conditions for adults, so it might exclude coverage for
treatment of an adults preexisting medical condition
such as diabetes or cancer (PHS Act section 2704).
If the coverage is an individual market policy, may
not meet standards related to discrimination based on
health status (PHS Act section 2705).
May not meet standards for non-discrimination
with respect to health care providers (PHS Act section
2706).
May not cover essential health benefits or limit
annual out-of-pocket spending, so it might not cover
benefits such as prescription drugs or maternity care,
or might have unlimited cost sharing (PHS Act section
2707).
May not meet standards for participation in clinical
trials, so you might not have coverage for services
related to a clinical trial for a life-threatening or other
serious disease (PHS Act section 2709).
How Do I Choose A Different Policy?
You have options for getting quality health insurance.
[You may shop in the Health Insurance Marketplace,
where all policies meet certain standards to help

App. 217a
guarantee health care security, and no one who is
qualified to purchase coverage through the
Marketplace can be turned away or charged more
because of a pre-existing medical condition. The
Marketplace allows you to choose a private policy that
fits your budget and health care needs. You may
qualify for tax credits or other federal financial
assistance to help you afford health insurance coverage
purchased through the Marketplace.]6
[You can also get new health insurance outside the
Marketplace.] All new policies guarantee certain
protections, such as your ability to buy a policy even if
you have a pre-existing medical condition. [However,
federal financial assistance is not available outside the
Marketplace.]
You should review your options as soon as possible,
because you may have to buy your coverage within a
limited time period.
How Can I Learn More?
To learn more about the Health Insurance
Marketplace and protections under the health care
law, visit HealthCare.gov or call 1-800-318-2596 or
TTY: 1-855-889-4325.
If you have questions, please contact us.

The bracket language does not apply to the U.S. territories

that do not have a Marketplace.