Several Tennessee state lawmakers have expressed concern about including “contractors” in SB1680.

No powers, assets, employees, agents or contractors of the state, including any institution under control of the University of Tennessee or the Tennessee board of regents, or any political subdivision, municipality or other local government entity shall be used to assist in implementing the federal Patient Protection and Affordable Care Act of 2010, or any subsequent federal amendment to such act.

The bill initially garnered 20 cosponsors, but shortly after introduction, 12 unexpectedly simultaneously dropped off. The underlying reason for the mass desertion remains unclear, but some lawmakers cited the contractor inclusion as their reason.

These legislators interpret the language as banning contractors from participating in the federal exchange. This would prove problematic since Blue Cross Blue Shield sells insurance through the exchange and holds a contract to provide coverage for Tennessee state employees.

Sen. Mark Green made this argument in a Facebook thread.

The statement that a contractor, meaning any company the state of TN signs a contract with, can not do business on the federal exchange is TN telling a business that is not a part of the government just one of our contractors that that private company can not do business on the exchange. I have a problem telling a company in TN it can’t do business outside TN.

Later in the thread, he clarifies the concern.

Here is more on my concern with having the contractors in there. Blue Cross Blue Shield is the contractor for healthcare for the state employees of TN. If you say no contractor of TN can participate, essentially TN is telling the independent business BCBS it can not do business in the exchange and still be the contractor. Some people are OK telling a business in TN who they can and can not do business with but to me that’s the whole reason I hate Obamacare – same principle.

If one takes this broad view of the language, and it does prohibit a company from participating in the exchange while contracting with the state, Green and others who share this view oppose a practice that the state engages in on a daily basis: it places requirements on companies desiring to contract with the state. I am sure Tennessee imposes countless standards and restrictions on contractors. Under Green’s reading, the proposed bill simply says that if the contractor chooses to engage in activity that serves to implement the PPACA, the state of Tennessee will no longer do business with it. It does not tell a business “who it can do business with.” The company can do business with whomever it chooses. The law simply clarifies who the state will do business with – a perfectly appropriate action. The choice lies with the perspective contractor.

This view makes it a question of principle. Do lawmakers really believe Obamacare violates the Constitution and will do immeasurable harm to Tennesseans? If so, it seems that would impose an obligation on lawmakers to do everything within their power to stop implementation of the program, including placing this kind of restriction on the companies the state chooses to do business with.

But in reality, these lawmakers read the language too broadly. The intent of the bill is to withdraw all state support from implementation of the ACA and leave it exclusively to the feds in Tennessee. It does not in any way prohibit citizens from participating in the program, nor does it interfere with federal implementation or administration of Obamacare. When taken within this proper context, we must read language relating to contractors in a narrower sense.

Look at the language again.

No powers, assets, employees, agents or contractors of the state…shall be used to assist in implementing…

Clearly, the law focuses on state action. It intends to stop Tennessee from lifting a finger to implement the health care program, and this includes prohibiting the state from “using” state contractors to affect implementation. For example, Tennessee could not contract with a computer company to set up and administer a website to sell insurance under the ACA. This does not preclude a contractor from independently entering into a business relationship with the federal government, such as selling insurance through the existing federal exchange. So as long as the state isn’t “using” the contractor to act on its behalf in the implementation of the health care program, the contractor remains free to continue doing business elsewhere as it chooses.

Take the case of Blue Cross Blue Shield. It contracts to provide coverage for Tennessee state workers. This clearly does not constitute the state “using” BCBS to implement Obamacare. So, the law would not impact the existing relationship between the state and company. But it would prohibit the state from contracting with Blue Cross to set up some aspect of Obamacare in the state.

We don’t know whether those withdrawing support of SB1680 legitimately fear placing an unfair burden on contractors, or if this argument was created as part of a larger strategy to undermine the bill. Regardless, upon careful reading and analysis, it becomes clear that the concerns are, at best, overstated.

Mike Maharrey

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