Texas restaurant group seeks to join Oklahoma AG's health-care lawsuit
BY WAYNE GREENE World Senior Writer
Wednesday, December 12, 2012
12/12/12 at 4:41 AM
Read the Tulsa World continuing coverage of the health care law.
A group of Texas restaurants has asked permission to join Oklahoma's legal challenge to the Affordable Care Act - arguing that it doesn't offer health benefits to its minimum-wage workers, doesn't intend to and doesn't think the federal government can force it to do so.
Last week, GC Restaurants and several related companies asked U.S. District Judge Ronald White of the Muskogee-based U.S. District Court of Eastern Oklahoma for permission to intervene in Oklahoma Attorney General Scott Pruitt's legal challenge to the health care law, better known as Obamacare.
Like Pruitt, the restaurant owners argue that health coverage mandates and taxes can't be imposed on businesses in states that have not established health insurance exchanges.
An exchange is an electronic marketplace for consumers to compare prices and services and purchase health insurance with the help of federal subsidies.
Most employers with more than 50 full-time workers face coverage mandates and stiff tax fines if they fail to offer qualifying health benefits and any of their employees end up purchasing subsidized health insurance through a state exchange.
Oklahoma and Texas are among the states that have refused to build exchanges to conform with the law, and Pruitt has argued that therefore the rules and tax can't be enforced here.
U.S. Justice Department attorneys have pointed out in court filings that if a state doesn't build an exchange, the federal health law requires the U.S. Department of Health and Human Services to build one for the state.
A state exchange and a federally facilitated exchange are not significantly different, and the requirements and the tax applies equally in all states, the U.S. Justice Department argued in filings earlier this month.
Federal attorneys also argued that Oklahoma couldn't challenge the legality of the law because its employee benefits would likely conform with minimum standards of the federal law, exempting it from the taxes.
The potential entry of the Texas restaurants would appear to lessen that issue because it clearly doesn't offer health benefits that conform with the federal law's minimum standards.
The restaurants offer low- to medium-priced menu items and maintaining those prices requires keeping a high portion of its workers at the minimum wage, the companies' filing says.
"The business model under which (the companies) operate does not allow for offering all full-time employees the opportunity to enroll in health coverage in accordance with the employer mandate," the filing says.
The companies estimate that their tax bill would be more than $1.3 million in 2014, according to the filing. The companies "cannot pass on to customers the cost ... without losing sales and suffering financial harm," the filing says.
The companies do not appear to do business in Oklahoma. According to its website, it operates a series of Old England's Lion & Rose restaurants and pubs in San Antonio and Austin. A related company that isn't seeking to be part of the lawsuit, San Antonio's Allen Tharp and Associates, operates the full food service contract at Lackland Air Force Base, according to a company website.
Allen Tharp is identified as the president of the San Antonio Tea Party in a May 19 press release, which says his restaurants have more than 800 employees and a $30 million economic impact on the local economy.
Adding the Texas restaurant companies to the challenge would not address another key issue raised by federal attorneys - the argument that no one can seek injunctions to block a federal tax until after the tax has been levied and paid, which wouldn't be true until sometime in 2014 under the Affordable Care Act.
However, the U.S. Supreme Court took up challenges to the Affordable Care Act last year and those challenges also sought injunctions. Also, the restaurants are challenging not just the taxes but also the law's coverage mandates.
A local attorney for the restaurants declined comment on the filing because the issue is under litigation. A spokesman for the U.S. Justice Department also declined comment.
Original Print Headline: Texas restaurants seek to join AG's lawsuit
Wayne Greene 918-581-8308
wayne.greene@tulsaworld.com
