Talk about NFIB deja vu. I previously blogged about an argument Marty Lederman advanced that has serious shades of NFIB: there is no employer mandate. Employers have a “choice” between providing their employees health insurance, or pay a tax. At the time, I wrote “Do not take Marty’s post lightly (I suspect this argument will find its way into a brief before the Court).”
Well, in the Solicitor General’s brief in the 10th Circuit petition Justice Sotomayor stayed, the government has seemed to adopt Lederman’s argument:
The preventive-services coverage provision in general, and the contraceptive-coverage provision in particular, apply only if an employer offers a group health plan. Employers, however, are not required to offer group health plans in the first place. Large employers (those with more than 50 full-time-equivalent employees) face a potential tax if they do not provide coverage, 26 U.S.C. 4980H (Supp. V 2011), but that gives them a “choice” between two legal options: provide a group health plan or risk payment of the tax. Liberty Univ., 733 F.3d at 98; cf. National Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2596-2597 (2012).
And yes, they cite NFIB. Pages 2596-297 covers the Chief’s saving construction, and the key representation made by the Government that there is no mandate. Here is the key paragraph:
In distinguishing penalties from taxes, this Court has explained that “if the concept of penalty means anything, it means punishment for an unlawful act or omission.” United States v. Reorganized CF & I Fabricators of Utah, Inc., 518 U.S. 213, 224, 116 S.Ct. 2106, 135 L.Ed.2d 506 (1996); see also United States v. La Franca, 282 U.S. 568, 572, 51 S.Ct. 278, 75 L.Ed. 551 (1931) (“[A] penalty, as the word is here used, is an exaction imposed by statute as punishment for an unlawful act”). While the individual mandate clearly aims to induce the purchase of health *2597 insurance, it need not be read to declare that failing to do so is unlawful. Neither the Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS. The Government agrees with that reading, confirming that if someone chooses to pay rather than obtain health insurance, they have fully complied with the law. Brief for United States 60–61; Tr. of Oral Arg. 49–50 (Mar. 26, 2012).Indeed, it is estimated that four million people each year will choose to pay the IRS rather than buy insurance. See Congressional Budget Office, supra, at 71. We would expect Congress to be troubled by that prospect if such conduct were unlawful. That Congress apparently regards such extensive failure to comply with the mandate as tolerable suggests that Congress did not think it was creating four million outlaws. It suggests instead that the shared responsibility payment merely imposes a tax citizens may lawfully choose to pay in lieu of buying health insurance.The plaintiffs contend that Congress’s choice of language—stating that individuals “shall” obtain insurance or pay a “penalty”—requires reading § 5000A as punishing unlawful conduct, even if that interpretation would render the law unconstitutional. We have rejected a similar argument before. In New York v. United States we examined a statute providing that “ ‘[e]ach State shall be responsible for providing … for the disposal of … low-level radioactive waste.’ ” 505 U.S., at 169, 112 S.Ct. 2408 (quoting 42 U.S.C. § 2021c(a)(1)(A)). A State that shipped its waste to another State was exposed to surcharges by the receiving State, a portion of which would be paid over to the Federal Government. And a State that did not adhere to the statutory scheme faced “[p]enalties for failure to comply,” including increases in the surcharge. § 2021e(e)(2); New York, 505 U.S., at 152–153, 112 S.Ct. 2408. New York urged us to read the statute as a federal command that the state legislature enact legislation to dispose of its waste, which would have violated the Constitution. To avoid that outcome, we interpreted the statute to impose only “a series of incentives” for the State to take responsibility for its waste. We then sustained the charge paid to the Federal Government as an exercise of the taxing power.Id., at 169–174, 112 S.Ct. 2408. We see no insurmountable obstacle to a similar approach here.10
In Unprecedented, I talk about the Solicitor General’s insight in adopting this argument, and the importance of the citation to New York v. United States. It is remarkable how this argument has returned.
Kudos to Marty.