3 42 U.S.C. § 18031(f)(3), referenced in the text quoted above, permits an Exchange to contract with an outside entity to perform one or more of the Exchange’s responsibilities. Likewise, 42 U.S.C. § 18041(c) permits the Secretary of Health and Human Services to contract with a Case 1:13-cv-00623-PLF Document 38 Filed 09/27/13 Page 21 of 42 12 provision’s cross-reference to 42 U.S.C. § 18041(c) makes clear that Congress used the term “Exchange” to include the Exchange operated by the federal government under that provision, and that it intended that taxpayers would receive federal tax credits and cost-sharing reductions when purchasing insurance on that Exchange. Under Klemencic’s reading, by contrast, Section 36B(f)(3) would direct the federally-facilitated Exchange to perform an empty act; in his view, the “amount of such credit,” and “the aggregate amount of any advance payment” of such credit to be reported would necessarily always be zero.

As a result of that choice, HHS was required to establish such programs on behalf of the State. 42 U.S.C. § 18041(c). Having chosen to impose upon HHS the burden and costs of implementing ACA reforms, the State cannot credibly argue that its laws nevertheless control the manner in which HHS does so.

Rather, the federal government is establishing in Oklahoma a federal Exchange pursuant to Section 1321 of the ACA. ACA § 1321(c), 42 U.S.C. § 18041(c). 7.

Specifically, it provides that: Case 1:16-cv-02039-GLR Document 41-1 Filed 08/15/16 Page 22 of 25 21 If . . . the Secretary determines . . . that an electing State . . . has not taken the actions the Secretary determines necessary to implement . . . the other requirements set forth in the standards under subsection (a) . . . the Secretary shall . . . take such actions as are necessary to implement such other requirements. See 42 U.S.C. § 18041(c). The list of “standards under subsection (a) of section 1321” includes, in turn, “the establishment of the . . . risk adjustment program[.]”

The contribution is housed in 42 U.S.C rather than 26 U.S.C. (the tax code), and Congress placed responsibility for the program with states and the Secretary of Health and Human Services, rather than with the Internal Revenue Service or the Department of Treasury. See 42 U.S.C. § 18061(b)(1)(B) and 42 U.S.C. § 18041(c)(1). The vast majority of reinsurance contributions are used to fund reinsurance payments to individual market issuers of Case 8:16-cv-02186-DKC Document 18-1 Filed 11/28/16 Page 16 of 26 12 reinsurance eligible plans, not to generate revenue.