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Ohio Attorney General, universities sue over health care law tax on state, local governments

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COLUMBUS, Ohio — Applying a tax aimed at helping keep premiums affordable under the federal health care law to state and local governments is unconstitutional, Ohio Attorney General Mike DeWine claimed in a lawsuit filed Monday.

The complaint argues there's no precedent for the collection of $6.25 million for 2014 from government entities and nothing in the health overhaul law that allows such a tax.

The lawsuit also challenges a provision in the law that calls for a chunk of the money being collected to go directly into the Treasury's general fund and not the health care program.

At issue is a provision in the law permitting tax assessments against health insurance companies and certain employers who offer self-insured group health plans.

The government lacks constitutional authority to impose "such broad-based, revenue-generating taxes" against states and local governments, the lawsuit said. It seeks a return of the money and stopping similar assessments for 2015 and 2016.

The parties include the state, Warren County, the University of Akron, Bowling Green State University, Shawnee State University and Youngstown State University.

The lawsuit is a follow-up to a Jan. 8 letter sent to U.S. Health and Human Services Secretary Sylvia Burwell protesting the tax, DeWine, a Republican, said in a statement. His office said the lawsuit is believed to be the first challenge of the tax nationally.

The Department of Health and Human Services declined to comment on the lawsuit.

The agency says the law has helped keep premiums affordable, with eight of 10 people enrolled in the federally run insurance marketplace as of December getting coverage for $100 or less per month after tax credits in 2015.

The lawsuit challenges the following assessments: $5.4 million from the state, $325,584 from the University of Akron, $275,247 from Bowling Green State University, $108,517 from Youngstown State, $94,710 from Warren County and $56,007 from Shawnee State.

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