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Health care law’s Indiana roadblock


Rep. Marlin Stutzman has made Fort Wayne Community Schools the poster child in arguing that Obamacare’s regulations are burdensome. The 3rd District congressman has repeatedly pointed to the district’s decision to cut hours of part-time workers as a reason to repeal the federal health care law.

But when a lawsuit challenging the law’s employer mandate was filed by the Indiana attorney general and 15 state school districts last week, FWCS wasn’t a plaintiff. The district’s chief financial officer said the school corporation wasn’t invited to join and that its objections are to the Internal Revenue Service’s interpretation of part-time employees, not to the law itself.

Consider the lawsuit a state-level version of the U.S. House’s mutiny. Rather than accept the federal health care law and work to improve it, the approach is to spend more taxpayer dollars challenging it.

“We continue to say this is a budget issue for us,” said FWCS’ Kathy Friend. “We needed to cut the budget, and we’re going to be cutting the budget more in the coming year.”

FWCS reduced the hours of about 620 part-time employees this year in anticipation of a requirement to provide health insurance for any worker employed 30 or more hours a week. Another 220 part-time employees were not affected because it was determined their job responsibilities required at least 30 hours a week. They will qualify for health care coverage, even though they previously did not.

To provide insurance for all 840 part-time workers, the district would have been faced with about $10 million in additional costs – an expense it can’t afford in the face of support drained away by vouchers, property tax caps and more.

The suit filed by Attorney General Greg Zoeller and 15 small school districts argues that the federal government does not have the authority to extend the employer mandate – and its financial penalties for employers with more than 50 full-time workers – in states that did not create their own health insurance exchanges.

“We contend the Affordable Care Act improperly regulates sovereign states and does not authorize the IRS to do what it is doing in treating the state as a taxable entity,” Zoeller said in a news release.

But Rep. Ed DeLaney, D-Indianapolis, said the Republican attorney general and other state officials are simply intent on denying Hoosiers the opportunity to benefit from the new health care law. He points to Indiana’s lead role in the lawsuit challenging Obamacare.

“The economic policy of the state of Indiana, as decreed by Mike Pence and his attorney general, is to deprive everyone of health insurance and ask the Supreme Court to undo the very thing it decided two years ago,” DeLaney said. “Mr. Zoeller lost his case in the Supreme Court. He should stop this game right now.”

The Indianapolis attorney said he believed the small school districts involved in the suit have been misled. If the districts can’t afford to provide insurance to employees, the state has a tax problem that needs to be solved.

“In the legislature, if we need to help our small districts – which are in a state of collapse – then let’s help them,” DeLaney said.

At FWCS, officials are in contract negotiations with employee groups affected by the hours reduction. In exchange for a loss in hours, the workers are likely to see an increase in their hourly rate.

The district’s CFO, in testimony before an IRS panel in April, urged the federal government to use a “common-sense” interpretation of part-time status for school workers, averaging their hours over a calendar year instead of the academic year.

As Friend noted, it’s a budget issue, not a health care policy issue. The 15 Indiana school districts, already battered by property tax changes, have attached themselves to a lawsuit that has more to do with fighting Obamacare than meeting a financial challenge.