Lawsuit Filed in Texas Claims ObamaCare Harms Small Employers


By Hadley Heath

A lawsuit filed by a Houston-based doctor is making its way through the legal system: Hotze v. Sebelius will be heard before the 5th Circuit Court of Appeals.

This case challenges ObamaCare with three main claims:

1. It challenges the mandate to buy insurance as a violation of the 5th Amendment Takings Clause. 

Remember, SCOTUS has already heard challenges to the individual mandate on other grounds (namely the Commerce Clause and the Taxing Power), and upheld it. This is a new challenge because it relies on a different argument to show that mandates to buy insurance are unconstitutional. The Takings Clause says, "Private property shall not be taken for a public use, without just compensation."

2. Hotze challenges the passage of the ACA on Origination Clause grounds.

Simliar to Sissel v. HHS, this case points out that ObamaCare, a revenue-raising bill, originated in the Senate, which is unconstitutional.

3. This case also makes a federalism argument, pointing out that ObamaCare will result in the redistribution of wealth away from the State of Texas.

The plaintiffs, Dr. Hotze and his 97-employee wellness clinic, are put between a rock and hard place (like many other employers under ObamaCare) because they must change their HSA-based employer health plan into an ObamaCare-compliant plan. There are costs associated with doing so, but on the other hand, there are penalties associated with not doing so. 

Keep an eye on this case and others as it advances to the 5th Circuit.


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