Northern Arapaho file lawsuit over Large Employer mandate

The Northern Arapaho have filed a federal lawsuit aimed at keeping its workers insured under the Affordable Care Act.

The suit argues that an Internal Revenue Service rule improperly requires the Northern Arapaho to provide employer-based health insurance plans to 600 workers, including those working in Tribal government and the Wind River Casino.

The Northern Arapaho Tribe is the largest employer in Fremont County. When the Internal Revenue Service rule goes into effect on January 1, 2015, Tribal businesses will have to comply with the Affordable Care Act’s “Large Employer mandate.”

That provision requires all businesses with more than 50 employees to provide health insurance for their workers. As a result, employees at Tribal businesses would become ineligible to purchase subsidized insurance from companies that list plans on Healthcare.gov, the federal health insurance exchange.

That doesn’t sit well with Northern Arapaho leaders.

“The Northern Arapaho Business Council fully supports what Congress and the President have accomplished with the Affordable Care Act, but the folks in the agencies have taken a wrong turn in implementing it,” said Councilman Darrell O’Neal in a statement.

The Northern Arapaho case was filed in federal District Court in Cheyenne on Dec. 8. It argues that the Affordable Care Act (ACA) does not count tribes as Large Employers, and that Congress didn’t intend for the IRS to view tribes that way because doing so would remove important benefits.

“Congress did not intend to create special benefits for working-class Native Americans, only to have Defendants promulgate regulations that prevent working-class Native Americans who work for Tribes from obtaining those benefits,” the suit states.

Applying the “Large Employer mandate” to Northern Arapaho businesses would preclude workers from buying the ACA’s subsidized insurance plans — which are offered to all Americans who make up to 400 percent of poverty level. (Section §1401 of the ACA.)

The suit further points out that the IRS rule would remove a co-pay exemption provided specifically to American Indians by the ACA. This provision exempts tribal members from making co-pays on treatment if their income does not exceed 300 percent of the poverty level. (Summary of section §1402(d) of the ACA.)

“Congress created these benefits for working-class Native Americans and their families,” said Councilman Richard Brannan in a statement. “The IRS overlooked their trust obligations and treaty responsibilities in putting forward these rules that undermine benefits for Native Americans.”

Since the passage of the ACA the Northern Arapaho have counseled their employees to seek coverage from companies that offer plans on the federal health care exchange. The Northern Arapaho tribe currently pays 80 percent of the premiums for Tribal workers who get subsidized coverage under the ACA.

The Northern Arapaho previously offered employer-based plans, but found them more costly.

“We’ve made a lot of progress enrolling tribal workers on insurance policies available on the healthcare exchange,” said Chairman Dean Goggles. “We’re asking for the court’s help to implement the ACA as Congress intended.”

If the Northern Arapaho were to go back to insuring through its employers, the lawsuit claims that the coverage would be more expensive and less comprehensive than what is offered by companies on Healthcare.gov. That’s because employer-based insurance has lower standards for minimum essential coverage compared to ACA plans, and is not subsidized by sections §1401 and §1402(d) of the ACA.

Many Northern Arapaho employees are employed by the Wind River Casino, a gas station, a laundry, and other enterprises. The majority of the workers make $12 to $15 an hour, and are under 300 percent of the poverty level. The suit argues that many in this group could not afford employer-based health insurance.

At the same time, Congress made enrolled tribal members exempt from the individual mandate requiring able-bodied adults to buy health insurance, or instead pay a tax penalty. Faced with the decision of buying employer-based plans outside of their price range that require co-payments or buying an unsubsidized plan from the federal marketplace, many employees will opt to go without insurance at all, the lawsuit argues.

That would leave workers with the option of visiting Indian Health Service clinic, which rations care and often turns away patients due to its tight budget. Alternatively they could seek charity care at the emergency rooms in Lander or Riverton. The Wyoming Hospital Association calculated that these Fremont County Hospitals provided $15.2 million in uncompensated care in 2012, not all of it from Tribal members. That puts a drain on hospital budgets and shifts costs to those with health insurance.

To prevent these outcomes, the lawsuit requests an injunction striking down the rule applying the “large employer mandate” to the Northern Arapaho. If the mandate is not struck down, the suit requests that the practice of enrolling members on Healthcare.gov satisfies the mandate.

The suit concludes: “Application of the Large Employer mandate to the Northern Arapaho Tribe (will) impose severe financial burdens on the Tribal government, decrease the Tribe’s ability to expand health care coverage and provide other essential governmental services, and frustrate the intent of Congress.”

Complaint

— Gregory Nickerson is the government and policy reporter for WyoFile. He writes the Capitol Beat blog. Contact him at greg@wyofile.com or follow him on twitter @GregNickersonWY.

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