The U.S. Supreme Court in Washington. Photo: Diego M. Radzinschi/ALM
The U.S. Supreme Court issued a short ruling Wednesday that could help employers and benefits advisors fight sudden changes in federal program rules and funding levels.
The ruling affects efforts by the AIDS Vaccine Advocacy Coalition, the Global Health Council and other nonprofit organizations to get paid by the U.S. State Department for health care services already performed, in the face of efforts by the new Department of Government Efficiency to cut off funding for those types of services on short notice.
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The U.S. District Court for the District of Columbia told the State Department that it has to make the expected payments for any work the plaintiffs have completed by Feb. 26.
Lawyers for the State Department objected.
The Supreme Court ruled 5-4 on the case, Department of State et al. v. AIDS Vaccine Advocacy Coalition et al., that the lower court should clarify the compliance deadlines but can require the State Department to make the payments while litigation about a preliminary program funding injunction is underway, according to the ruling.
Chief Justice John Roberts sided with the majority along with four other justices: Sonia Sotomayor, Elena Kagan, Amy Coney Barrett and Ketanji Brown Jackson.
Justice Samuel Alito wrote a dissenting opinion, and Clarence Thomas, Neil Gorsuch and Brett Kavanaugh sided with Alito.
"Does a single district-court judge who likely lacks jurisdiction have the unchecked power to compel the government of the United States to pay out (and probably lose forever) 2 billion taxpayer dollars? " Alito writes in his dissenting opinion. "The answer to that question should be an emphatic 'No,' but a majority of this court apparently thinks otherwise. I am stunned."
The dispute between the plaintiffs in the new case appears to resemble the arguments that health insurers made when the insurers were fighting to make the first administration of President Donald Trump make good on promises the administration of former President Barack Obama had made about Affordable Care Act commercial health insurance risk management programs.
The court ended up agreeing a new administration had to make good on payment promises made during a previous administration.
Related: Supreme Court rules for health insurers in $12B Obamacare dispute
Alito contends in the new opinion that the current case is different because the rules for "sovereign immunity," or the ability of the government to fend off most lawsuits, will probably keep the district court from making the federal government pay the plaintiffs that brought the suit.
What it means: The ruling implies that a majority of the Supreme Court justices could be sympathetic to efforts by private-sector companies and nonprofit groups to keep the federal government from making sudden funding changes.
In the benefits sector, that could help companies like health insurers that provide health plans for participants in the Federal Employees Health Benefits Program.
The justices' views could also affect private-sector parties involved in other types of disputes, such as any future efforts by the federal government to change group health tax exclusion rules or other benefits tax rules on short notice, without going through a formal rulemaking process and without giving members of the public a chance to comment on the changes.
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