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DISTRICT OF COLUMBIA COURT OF APPEALS
Nos. 17-TX-1296, 17-TX- 1297, 17-TX-1298, 17-TX-1299, 17-TX-1300, & 17-TX-1301
UNUM LIFE INSURANCE COMPANY OF AMERICA ET AL., APPELLANTS,
v.
DISTRICT OF COLUMBIA, APPELLEE.
Appeal from the Superior Court of the District of Columbia (CVT1-17, CVT2-17, CVT3-17, CVT4-17, CVT5-17, CVT6-17)
(Hon. Russell F. Canan, Trial Judge)
(Argued April 23, 2019 Decided September 24, 2020)
Carl Erdmann, with whom Chris Bowers and Nathan Wacker were on the brief, for appellants.
Loren L. AliKhan, Solicitor General for the District of Columbia, with whom Karl A. Racine, Attorney General for the District of Columbia, Stacy L. Anderson and Mary L. Wilson, Assistant Attorneys General, were on the brief, for appellee.
Before BECKWITH and EASTERLY, Associate Judges, and KRAVITZ, Associate
Judge, Superior Court of the District of Columbia. *
* Sitting by designation pursuant to D.C. Code § 11-707(a) (2012 Repl.). 2
EASTERLY, Associate Judge: As part of the comprehensive health care
reforms enacted in the Patient Protection and Affordable Care Act (“ACA”), Pub.
L. No. 111-148, 124 Stat. 119 (2010) (codified as amended in scattered sections of
21, 25, 26, 29, 42 U.S.C.), Congress gave states a temporary financial incentive to
take part in a new health insurance marketplace and establish health benefit
exchanges where individuals and small businesses could more easily purchase
plans meeting minimum federal requirements. After the ACA’s enactment, the
District of Columbia Council established a health benefit exchange and authorized
the entity overseeing the exchange to fund it through a tax on all health insurance
companies doing a certain amount of business in the District. See D.C. Code
§§ 31-3171.01(6), 31-3171.03(f)(1) (2016 Repl.). A group of insurers who are
subject to the tax but do not offer health plans on the District’s exchange, among
them Unum Life Insurance Company, have challenged the tax, arguing that (1) the
Council’s legislation is preempted by the ACA, which does not permit the District
to levy such a tax on these insurers, and (2) by allowing an executive agency to
administer the tax, the Council impermissibly delegated its legislative power and
violated the nondelegation doctrine as applied to the District’s government. The
trial court rejected these arguments and granted the District summary judgment.
We uphold the District’s law against the insurers’ challenge and affirm. 3
I. Facts and Procedural History
Among other reforms, the ACA established American Health Benefit
Exchanges (“Exchanges”) to “facilitate[] the purchase” by individuals and small
businesses of “qualified health plans” meeting certain statutory and regulatory
qualifications as set out in the ACA. 42 U.S.C. § 18031(b) (2018); see id.
§§ 18021, 18022(c) (defining qualified health plans). See generally King v.
Burwell, 135 S. Ct. 2480, 2485–87 (2015) (summarizing ACA’s reforms, including
the role of the Exchanges). Congress gave states the option to establish and
administer these Exchanges themselves, so long as the Exchange was a
government agency or nonprofit and met other minimum requirements, such as
maintaining an internet website through which individuals could enroll and a toll-
free telephone hotline to field user requests. 42 U.S.C. §§ 18031(b), 18041(a)–(b).
Exchanges were permitted to offer only qualified health plans, see id.
§ 18031(d)(2)(A), and could not sell certain types of insurance, see id. §§ 300gg-
63, 300gg-91(c), 18032(d)(2)(B). For those states that declined to create their own
Exchange, Congress directed the United States Department of Health and Human
Services (“HHS”) to operate an Exchange in those states. Id. § 18041(c). States
that established Exchanges would receive federal financial and technical support,
but only for the first few years after the ACA’s enactment. Id. § 18031(a). The
ACA provided that by January 1, 2015, the “State shall ensure that such Exchange 4
is self-sustaining . . . , including allowing the Exchange to charge assessments or
user fees to participating health insurance issuers, or to otherwise generate funding,
to support its operations.” Id. § 18031(d)(5).
The District of Columbia opted to establish the District of Columbia Health
Benefit Exchange (“Exchange”) and created the District of Columbia Health
Benefit Exchange Authority (“Authority”) to oversee and implement it. See Health
Benefit Exchange Authority Establishment Act of 2011 (“Establishment Act”),
D.C. Law 19-94, 59 D.C. Reg. 213 (codified as amended at D.C. Code §§ 31-
3171.01 to -3171.18). It also formed the District of Columbia Health Benefit
Exchange Authority Fund (“Fund”) and specified that any revenues placed into the
Fund would be used to administer the Exchange. See D.C. Code § 31-3171.03(a).
To fund the Exchange, the Council instructed the Authority to assess all health
insurance carriers “doing business in the District” whose gross receipts met or
surpassed $50,000 in one year, without regard to whether these insurers offer plans
on the Exchange (referred to by the parties as the “health carrier tax”). See Health
Benefit Exchange Authority Financial Sustainability Amendment Act of 2015,
D.C. Law 21-13, 62 D.C. Reg. 5946 (codified at D.C. Code §§ 31-3171.01, 31-
3171.03); D.C. Code § 31-3171.01(6). “These assessments shall be deposited in
the Fund.” D.C. Code § 31-3171.03(f)(1). The Council set the health carrier tax at 5
“an amount based on a percentage of [the insurer’s] direct gross receipts for the
preceding calendar year.” D.C. Code § 31-3171.03(f)(1). It directed the Authority
to “adjust the assessment rate in each assessable year” and required that the
“amount assessed shall not exceed reasonable projections regarding the amount
necessary to support the operations of the Authority.” D.C. Code § 31-
3171.03(f)(2)–(3).
The insurers pursuing this appeal all do business in the District, but they
have never sold a plan on the Exchange, do not offer “qualified health plans”
within the meaning of the ACA, and consequently may not offer their insurance
plans for sale on the Exchange. See 42 U.S.C. § 18031(d)(2)(B)(i). Pursuant to
the health carrier tax, they were assessed by the Authority approximately $400,000
in the aggregate in 2016. The insurers paid their assessments under protest,
requested reconsideration by the Authority, and, when those requests were denied,
filed a petition in the D.C. Superior Court in January 2017, challenging the legality
of the health carrier tax.
The insurers filed suit in Superior Court because the federal courts
foreclosed any challenge to D.C. Code § 31-3171.03(f) in that forum. In 2014, a
trade association of insurance companies sued the Authority, the District, and 6
others in the United States District Court for the District of Columbia and raised
various challenges to the statute, including that it was preempted by the ACA and
violated nondelegation principles. Am. Council of Life Insurers v. District of
Columbia Health Benefit Exch. Auth. (“ACLI I”), 73 F. Supp. 3d. 65, 73–74
(D.D.C. 2014), vacated, 815 F.3d 17 (D.C. Cir. 2016). The district court rejected
all of the trade association’s arguments and upheld the statute. See id. at 111. The
United States Court of Appeals for the District of Columbia Circuit vacated this
decision and remanded for the District Court to dismiss the suit on jurisdictional
grounds. Am. Council of Life Insurers v. District of Columbia Health Benefit Exch.
Auth. (“ACLI II”), 815 F.3d 17, 21 (D.C. Cir. 2016). The Circuit reasoned that
D.C. Code § 31-3171.03(f) imposed a tax, and “exclusive jurisdiction over
challenges to taxes imposed by the District” lay in the D.C. Superior Court. Id. at
19.
Relitigating many of the same issues that had been raised in federal district
court, the insurers and the District filed cross-motions for summary judgment and
proceeded on stipulated facts in Superior Court. Like the challenger in ACLI I, the
insurers argued that the health carrier tax was preempted by the ACA and violated
nondelegation principles. In ruling on the motions, the Superior Court adopted and 7
incorporated the ACLI I opinion and granted the District’s motion for summary
judgment and denied the insurers’ motion. This appeal followed.
II. Standard of Review
A trial court properly grants summary judgment where the record “show[s]
that there is no genuine issue of material fact and that the moving party is entitled
to judgment as a matter of law.” Bruno v. W. Union Fin. Servs., Inc., 973 A.2d
713, 717 (D.C. 2009) (quoting Super. Ct. Civ. R. 56(c)). “In reviewing a trial court
order granting a summary judgment motion, we conduct an independent review of
the record, and our standard of review is the same as the trial court’s standard in
considering summary judgment.” Id. (internal quotation marks omitted). Our de
novo review extends to embedded constitutional claims, Walton v. District of
Columbia, 670 A.2d 1346, 1352–53 (D.C. 1996), and matters of statutory
interpretation, Tippett v. Daly, 10 A.3d 1123, 1126 (D.C. 2010) (en banc).
III. Preemption
We are asked to determine whether a provision of the ACA, 42 U.S.C.
§ 18031(d)(5)(A), directing states to “ensure” that their Exchanges are “self-
sustaining,” preempts the District’s health carrier tax under D.C. Code § 31- 8
3171.03(f)(1). “[P]ursuant to the Supremacy Clause, federal law may preempt
state law, either expressly or impliedly.” Murray v. Motorola, Inc., 982 A.2d 764,
771 (D.C. 2009). Express preemption exists where the federal statute “reveals an
explicit congressional intent to preempt state law,” usually through a specific
statutory provision. Id. (internal quotation marks omitted). Implied preemption
occurs in one of two ways: (1) field preemption, “when federal law so thoroughly
occupies a legislative field as to make reasonable the inference that Congress left
no room for the States to supplement it,” id. at 772 (internal quotation marks
omitted); or (2) conflict preemption, “where compliance with both federal and state
regulations is a physical impossibility, or where state law stands as an obstacle to
the accomplishment and execution of the full purposes and objectives of
Congress,” id. at 771 (internal quotation marks omitted).
The ACA contains no express preemption provision, and the insurers have
not argued as much. The statute does contain, however, what could be called an
express nonpreemption provision, which states “[n]othing in this title shall be
construed to preempt any State law that does not prevent the application of the
provisions of this title.” 1 42 U.S.C. § 18041(d). At the very least this provision
1 Because the statute contains an express nonpreemption provision, it seems unnecessary to rely on a common law presumption against preemption as the (continued…) 9
bars a field preemption analysis. Conflict preemption is thus the only possible
avenue of attacking D.C. Code § 31-3171.03(f)(1). The showing required for
conflict preemption—that compliance with both laws is physically impossible or
the state law, in effect, would obstruct the “accomplishment and execution” of
Congress’s goals, Murray, 982 A.2d at 771—appears to align with the language of
§ 18041(d) precluding preemption unless a state law “prevent[s the] application of”
title 42 of the United States Code. In the absence of any argument by the parties
that 42 U.S.C. § 18041(d) supplants or diverges from a traditional conflict
preemption analysis, we examine whether the health carrier tax is preempted in
accordance with those principles.
(…continued) District invites us to do. In any event, this presumption—which favors the nonpreemptive interpretation of a statute where it is subject to multiple plausible interpretations, see, e.g., Bates v. Dow Agrosciences LLC, 544 U.S. 431, 449 (2005)—is not consistently discussed or applied by courts. The presumption appears to be most often invoked when federal law legislates in areas of “traditional state regulation.” Id. Although states have traditionally regulated insurance, see N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 654–55 (1995), this does not describe the state- administered Exchanges, which are the product of a federal initiative. Cf. Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341, 347 (2001) (“[T]he relationship between a federal agency and the entity it regulates is inherently federal in character because the relationship originates from, is governed by, and terminates according to federal law.”). 10
A. Plain Language
To conduct a conflict preemption analysis, we employ our usual tools of
statutory interpretation and, as always, look first to the text of the federal statute.
See N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co.,
514 U.S. 645, 655 (1995) (“[W]e begin as we do in any exercise of statutory
construction with the text of the provision in question, and move on, as need be, to
the structure and purpose of the Act in which it occurs.”); Kennedy v. City First
Bank of D.C., N.A., 88 A.3d 142, 144–45 (D.C. 2014); see also Tippett, 10 A.3d at
1126.
The relevant provision, 42 U.S.C. § 18031(d)(5)(A), provides:
In establishing an Exchange under this section, the State shall ensure that such Exchange is self-sustaining beginning on January 1, 2015, including allowing the Exchange to charge assessments or user fees to participating health insurance issuers, or to otherwise generate funding, to support its operation.
Each party tells us that this text plainly supports its position, with the insurers
arguing, on the one hand, that the statute requires that an Exchange itself be self-
sustaining without assistance from other sources of state funding, and the District
claiming, on the other, that it requires a state to maintain a self-sustaining 11
Exchange, without reliance on federal funding. We conclude that the plain text is
ambiguous.
The insurers focus on language in the statute that “the Exchange” be “self-
sustaining,” which they interpret to mean that the Exchange “must produce funds
from its own operations only.” As a preliminary matter, we are unpersuaded by
the insurers’ argument that, by using the term “self-sustaining” in § 18031(d)(5),
Congress clearly intended to “incorporate the well settled meaning” of the term in
the Independent Offices Appropriations Act (“IOAA”), 31 U.S.C. § 9701 (2018).
First, the IOAA, which applies to agencies of the United States government, 31
U.S.C. § 101, does not apply to the Authority, a state agency, D.C. Code § 31-
3171.02(a); see 42 U.S.C. § 18031(d)(1). Relatedly, it is not helpful to the insurers
that HHS invoked the IOAA when administering its Exchange pursuant to 42
U.S.C. § 18041(c). Notice of Benefit and Payment Parameters for 2015, 79 Fed.
Reg. 13,744, 13,746 (Mar. 11, 2014) (codified at 45 C.F.R. Parts 144, 147, 153,
155, 156 and 158); see 45 C.F.R. § 155.20. Since HHS is subject to the IOAA’s
requirements by virtue of its status as a United States agency, 42 U.S.C. § 3501, it
must be “self-sustaining” pursuant to that statute, not by provision of the ACA,
which is silent on whether the federal Exchange must be self-sustaining and
separately imposes this requirement only on the state-run Exchanges. Compare 42 12
U.S.C. § 18041(c)(1), with id. § 18031(d)(5). Second, the ACA as a whole does
not mention or incorporate the IOAA, and, in particular, does not refer to it in
relation to the Exchanges. Cf. Sullivan v. Stroop, 496 U.S. 478, 484 (1990). Third,
the insurers have not articulated why we should read this term from the two
statutes equivalently, as they neither relate to the same subject matter nor have the
same purpose. See Holt v. United States, 565 A.2d 970, 975 (D.C. 1989). Fourth,
the insurers have not put forward a persuasive argument for why “self-sustaining”
is a “term of art” that incorporates IOAA case law. Air Wis. Airlines Corp. v.
Hoeper, 571 U.S. 237, 248 (2014) (internal quotation marks omitted). The cases
cited by the insurers purport to interpret the IOAA as a whole and do not
emphasize that specific term, e.g., Nat’l Cable Television Ass’n v. United States,
415 U.S. 336, 340–41 (1974), undercutting the premise that, as used in that statute,
“self-sustaining” is a distinctive legal term of art. Even if “self-sustaining” is a
term of art in the IOAA context, the insurers fail to explain why the ACA would
look to the IOAA to define “self-sustaining” instead of one of the seventy-six other
instances where this term appears in the United States Code, e.g., 15 U.S.C.
§§ 1153, 8842 (2018) (Department of Commerce); 44 U.S.C. § 1903 (2018)
(government printing); 45 U.S.C. § 745(a) (2018) (railroads). Fifth and finally, the
reason federal courts have interpreted this language in the IOAA to prohibit federal
agencies from levying taxes and to permit only the assessment of user fees— 13
concerns about constitutional separation of powers, Nat’l Cable, 415 U.S. at 340–
41—is inapplicable here. The Exchange, an executive agency, did not impose the
health carrier tax on the insurers; the D.C. Council, a legislative body, enacted it.
The IOAA aside, the insurers’ plain-language argument has some force.
Arguably, 42 U.S.C. § 18031(d)(5)(A) requires “Exchanges” to be “self-
sustaining” in the sense that they must generate their own funding internally. As
the insurers note, “the ordinary meaning of self-sustaining is ‘able to maintain
oneself or itself by independent effort.’” Yet we are mindful that “a word in a
statute may or may not extend to the outer limits of its definitional possibilities.”
Tippett, 10 A.3d at 1127 (internal quotation marks omitted). Here, we hesitate to
read “self-sustaining” in such a limiting manner, given that the statute expressly
places an obligation on the State to “ensure” that the Exchange is self-sustaining.
Particularly when read in conjunction with the subsequent language that permits
the state to authorize an Exchange “to charge assessments or user fees to
participating health insurance issuers[] or to otherwise generate funding[] to
support its operation,” this language suggests both that the state shoulders some
responsibility for the solvency of the Exchange and that the state may authorize the
Exchange to look beyond its own membership for funding. 14
The insurers also argue that § 18031(d)(5)(A) cannot be read to authorize
taxes on nonparticipating issuers because doing so would render the only example
of self-sufficiency in the statute—“to charge assessments or user fees to
participating health insurance issuers”—superfluous. But their argument that
Exchanges may impose only the kind of user fee described in the statute misreads
an example as a sole prescription and ignores other expansive language that, as
noted above, also “includ[es],” in specifying the means by which a state may
“ensure” that an Exchange becomes self-sustaining, “allowing the Exchange . . . to
otherwise generate funding[] to support its operations.” Id. Relatedly, we reject
the insurers’ argument that this single example limits the interpretation of how
Exchanges could “otherwise” become self-sustaining. It may be evident in other
statutes that lists of examples have such a limiting effect, but it is not apparent that
§ 18031(d)(5)(A)’s one exemplar was meant to do so. Cf. Begay v. United States,
553 U.S. 137, 142 (2008) (explaining that the term “otherwise” placed in a statute
after multiple examples “can (we do not say must) refer to a [thing] that is similar
to the listed examples in some respects but different in others” (citation omitted)),
abrogated on other grounds by Johnson v. United States, 135 S. Ct. 2551 (2015).
For its part, the District argues that 42 U.S.C. § 18031(d)(5)(A) was enacted
to ensure that the state Exchanges eventually operated without federal funding and 15
placed no constraints on the District’s ability to raise funds for the Exchange. The
District largely ignores the “self-sustaining” statutory language highlighted by the
insurers and focuses instead on the “otherwise generate funding” language
discussed above that is in tension with the insurers’ interpretation. We cannot
selectively read the text of the statute in either party’s favor. See Vining v. District
of Columbia, 198 A.3d 738, 750 (D.C. 2018) (“[E]ach provision of the statute
should be construed so as to give effect to all of the statute’s provisions, not
rendering any provision superfluous.” (internal quotation marks omitted)). And
we take the insurers’ point that if Congress had intended that result, it could have
omitted the “including” clause specifying how an Exchange could generate
funding, and simply enacted a statute that provided that “the State shall ensure that
its Exchange is no longer dependent on federal funds after January 1, 2015.”
We conclude that the plain language of § 18031(d)(5)(A) is not so clear and
unambiguous as either party suggests. Accordingly, we turn to our other tools of
statutory interpretation to discern Congress’s intent.
B. Other Tools of Statutory Interpretation
“The meaning . . . of certain words or phrases” in a statute “may only
become evident when placed in context.” Tippett, 10 A.3d at 1127 (internal 16
quotation marks omitted). Thus, when confronted with an ambiguous statutory
provision, we turn to “the language of surrounding and related paragraphs” and the
legislative scheme as a whole. Id. (internal quotation marks omitted); accord
Peoples Drug Stores, Inc. v. District of Columbia, 470 A.2d 751, 754 (D.C. 1983)
(en banc) (“[A] statute is to be construed in the context of the entire legislative
scheme.” (citation and internal quotation marks omitted)).
The aim of 42 U.S.C. § 18031, entitled “Affordable choices of health benefit
plans,” is to encourage states to set up their own health benefit Exchanges meeting
minimum requirements, within a specific timeframe, by removing start-up costs.
Section 18031(a) allows HHS to give states initial funding to establish their
Exchanges. Section 18031(b) obligates states to establish an Exchange by January
1, 2014, to be eligible to receive this funding. And § 18031(a)(4)(B) instructs HHS
not to award funding to states after January 1, 2015. In this context,
§ 18031(d)(5)(A) is best read as a directive to states that, when federal funds
expire, they must assume financial responsibility for the Exchange. We disagree
with the insurers that, so understood, § 18031(d)(5)(A) is superfluous in light of
§ 18031(a)(4)(B); rather, each provision is directed toward a different entity. 17
The titles in subsection § 18031(d)(5)(A)—for the entire subsection,
“Requirements”; for paragraph (5) “Funding Limitations”; and for subparagraph
(A) “No Federal funds for continued operations”—reinforce the understanding that
Congress’s aim was to set out general structural requirements for Exchanges and
one particular funding limitation: a sunset date for federal funding. See Murray,
982 A.2d at 773 (considering section titles in federal statute in determining that it
did not expressly preempt common law claims). At the same time, the flexibility
and autonomy afforded to states in the provisions of § 18031 and the Subchapter in
which it is located weigh against interpreting § 18031(d)(5)(A) as placing specific
limits on state Exchanges’ available revenue streams once they lose federal
support. When listing the “[r]equirements” for state-run Exchanges, 42 U.S.C.
§ 18031(d), Congress outlined general, “minimum” functions and did not impinge
on states’ prerogative either to provide additional services, id. § 18031(d)(4), or to
impose additional benefit requirements on the qualified health plans offered on its
Exchange, id. § 18031(d)(3). While Congress set “[f]unding limitations” on state-
run Exchanges, it explicitly proscribed only one funding source—federal funds
after January 1, 2015—and only one funding use—“wasteful use of funds.” Id.
§ 18031(d)(5). And Congress specifically highlighted its goal of granting states
flexibility to operate their Exchanges in neighboring provisions governing
Exchanges. See id. §§ 18041–18044 (title of this Part, “State Flexibility Relating 18
to Exchanges”); id. § 18041 (title of this provision, “State Flexibility in Operation
and Enforcement of Exchanges and Related Requirements”). Considered as a
whole, this framework communicates that Congress intended to reduce barriers to
the creation of state Exchanges and to specify only limited minimal requirements,
permitting states to build Exchanges to suit their population and its needs. It
follows that Congress would give states equal flexibility in determining how to
fund their Exchanges.
This interpretation of § 18031(d)(5)(A) aligns with the federal regulations
interpreting the same provision. 2 Cf. Wash. Convention Ctr. Auth. v. Johnson, 953
A.2d 1064, 1076 (D.C. 2008) (noting that “although the federal authorities are not
binding on us, we may properly look to [federal] regulations and case law as
persuasive authority in interpreting our own [analogous] statute” (internal
quotation marks omitted)). HHS, as a general matter, foresaw minimal
“Federalism implications,” when setting standards for qualified health plans and
requirements for Exchanges, because “States have choices regarding the structure
and governance of their Exchanges” under the statute. Establishment of
2 Federal regulations themselves may serve as a basis for preemption, see Goudreau v. Standard Fed. Sav. & Loan Ass’n, 511 A.2d 386, 389 (D.C. 1986), but the insurers have not made such an argument in this case. 19
Exchanges and Qualified Health Plans, 77 Fed. Reg. 18,310, 18,310–11, 18,443
(Mar. 27, 2012) (codified at 45 C.F.R. pts. 155–157). HHS’s regulations require
states to seek agency approval of their Exchanges, see 45 C.F.R. § 155.105, and to
submit a funding plan to obtain approval, see Establishment of Exchanges, 77 Fed.
Reg. at 18,322, but HHS emphasized that the ACA “provides flexibility for
Exchanges to generate support for continued operation in a variety of ways, such
as through user fees,” id. at 18,323; see also id. (observing that “Exchange
flexibility in funding ongoing operations is critical” and that “the Exchange has
discretion to set parameters related to assessments”).3 Concerns very similar to
those raised by the insurers here were brought to HHS’s attention—including
comments “ma[king] recommendations regarding the types of issuers that should
be subject to any assessments established by the Exchange,” with some specifically
requesting a mandate that issuers offering “excepted benefit plans[] be excluded.”
3 The insurers argue, however, that when HHS subsequently commented that “Exchanges will be financially self-sustaining with revenue sources at the discretion of the State,” Establishment of Exchanges, 77 Fed. Reg. at 18,443, HHS meant that “operating an exchange would be costless for states.” We disagree. In context, the statement quoted by the insurers reflects HHS’s judgment that the “flexibility” afforded to states by the ACA preserved substantial authority in the states in the administration of a complex federal regulatory regime, both because “States are not required to establish an approved Exchange” to begin with, and because the states that chose to administer their own Exchanges would have “discretion” to identify “revenue sources” for the Exchange. Id. (citing Exec. Order No. 13,132, § 6(b), 64 Fed. Reg. 43,255, 43,257–58 (Aug. 4, 1999)). 20
Id. Nonetheless, HHS declined to “limit Exchanges’ options [in generating
funding] by prescribing or prohibiting certain approaches.” Id.
For all of these reasons, we conclude that § 18031(d)(5)(A) should be read
as a directive to states to ensure that their Exchanges are self-sustaining after
federal funding is discontinued, and not as a limitation on how states “generate
funding” to support an Exchange’s operations, much less a prohibition on seeking
revenue beyond the one example given, “charg[ing] assessments or user fees to
participating health insurance issuers.” 42 U.S.C. § 18031(d)(5)(A). When
§ 18031(d)(5)(A) is read in this manner, there is no conflict between it and the
District’s health carrier tax. The tax does not “stand[] as an obstacle to the
accomplishment and execution of the full purposes and objectives of Congress.”
Murray, 982 A.2d at 771. If anything, the tax, which raises necessary revenue to
enable the operation of the Exchange without federal funding, furthers Congress’s
aim to expand the health care marketplace. Cf. Bostic v. District of Columbia
Hous. Auth., 162 A.3d 170, 174–75 (D.C. 2017) (holding that District law was not
preempted by federal law where District law supported the purpose of the federal
law). Notably, the insurers have not pointed us to any such case where a court
rejected a funding mechanism similar to the District’s health carrier tax as 21
preempted by the ACA. Accordingly, the insurers’ conflict preemption argument
fails.
IV. Nondelegation
The insurers also argue that the District’s health carrier tax, D.C. Code § 31-
3171.03(f)(1), in which the Council empowers the Authority to assess all health
carriers that do business in the District, violates the nondelegation doctrine.
Specifically, they claim that the Council impermissibly delegated legislative power
to the Authority by failing to articulate “intelligible principles” to guide the
Authority in levying its health carrier tax. We disagree.
The nondelegation doctrine, as applied to the United States government, “is
rooted in the principle of separation of powers that underlies our tripartite system
of [g]overnment,” and generally prevents one branch of government—executive,
legislative, or judicial—from delegating its authority to another. Mistretta v.
United States, 488 U.S. 361, 371–72 (1989). Balanced against this principle is the
recognition that, for government to run effectively, the distinct branches must
coordinate. Id. at 372. Therefore, the legislative branch may delegate some of its
power to another branch so long as it provides “an intelligible principle to which 22
the person or body authorized to exercise the delegated authority is directed to
conform.” Id. (internal quotation marks omitted).
Congress created the District’s government in “the familiar tripartite
structure,” Wilson v. Kelly, 615 A.2d 229, 231 (D.C. 1992), and the District’s
legislature, the Council, “recognizes the principle of separation of powers in the
structure of the District of Columbia government,” D.C. Code § 1-301.44(b) (2012
Repl.). Though there is good reason to think the nondelegation doctrine applies to
the District’s government, we have never held that it does. See Wilson, 615 A.2d
at 231 (“[I]t is reasonable to infer from this tripartite structure and the vesting of
the respective ‘power’ in each branch that the same general principles should
govern the exercise of such power in the District Charter as are applicable to the
three branches of government at the federal level.”). Since the District in its brief
to this court “assumes the applicability” of the doctrine to our government, we too
will assume for the purposes of our analysis that it applies to delegations by the
Council to District agencies.
To articulate an intelligible principle to satisfy the nondelegation doctrine,
the legislature must “clearly delineate[] the general policy, the public agency
which is to apply it, and the boundaries of this delegated authority.” Mistretta, 488 23
U.S. at 372–73 (internal quotation marks omitted). In evaluating nondelegation,
our analysis is not limited to the specific delegated authority; we consider the
statutory scheme as a whole, including the purposes articulated by the legislature,
limits placed on the delegation, and any guidance given to the agency. See Skinner
v. Mid-Am. Pipeline Co., 490 U.S. 212, 219–20 (1989); Mistretta, 488 U.S. at 374–
77.
We conclude that the Council provided sufficient “intelligible principles” in
D.C. Code § 31-3171.03(f)(1) to guide the Authority’s discretion in levying
assessments on health issuers to generate funds for the Exchange. The Council
identified the agency responsible for implementing its directive, the Authority, and
the specific group of health carriers to be assessed. D.C. Code § 31-3171.03(f)(1)
(providing that the “Authority” shall assess those “health carrier[s] doing business
in the District” only if their gross receipts from the preceding calendar year are
“$50,000 or greater”). It permitted the Authority to determine at what percentage
to set the assessment, id., but only to the extent that the total amount assessed
“shall not exceed reasonable projections” of what is “necessary to support the
[Exchange],” D.C. Code § 31-3171.03(f)(2). See Skinner, 490 U.S. at 219
(affirming delegation by Congress to Secretary of Transportation to set user fees
according to specific criteria where the fee schedule must “bear a reasonable 24
relationship to these criteria” (internal quotation marks omitted)). The Council
mandated that the Authority deposit the assessments into the Fund, which it must
administer “in accordance with generally accepted accounting principles,” and that
the Authority use the proceeds “solely for the purposes set forth in this chapter and
the costs of administering this chapter.” D.C. Code § 31-3171.03(a), (f)(2). The
Council also prohibited the Authority from using any funds for promotional
purposes, “[s]taff retreats,” or “[e]xcessive executive compensation,” D.C. Code
§ 31-3171.04(a)(22)(D), and it required the Authority to “keep an accurate
accounting of all activities, receipts, and expenditures” and submit “a report of the
accounting” to the Council each year. D.C. Code § 31-3171.04(a)(22)(A).
Furthermore, the Council provided guidance to the Authority by explicitly defining
its “duties and powers,” D.C. Code § 31-3171.04, and listing its “purposes,” D.C.
Code § 31.3171.02(b). These provisions clarify that the Authority’s mission is to
facilitate individuals’ and small employers’ access to affordable and
understandable health insurance and the ACA’s programs, tax credits, and cost-
sharing; improve the health insurance market place in the District; and “[r]educe
the number of uninsured,” among other goals. D.C. Code § 31.3171.02(b); see
Mistretta, 488 U.S. at 374. “We have no doubt that these multiple restrictions . . .
satisfy the constitutional requirements of the nondelegation doctrine.” Skinner,
490 U.S. at 220. 25
V. Conclusion
Because we hold that the District’s health carrier tax, D.C. Code § 31-
3171.03(f)(1), is not preempted by a provision of the ACA, 42 U.S.C.
§ 18031(d)(5)(A), and does not violate nondelegation principles, the judgment of
the Superior Court is affirmed.
So ordered.