Source: http://www.annalsofhealthlaw.com/annalsofhealthlaw/vol__24_issue_1?pg=143
Timestamp: 2019-04-25 11:52:00+00:00

Document:
for state partnership Marketplaces and maintains authority over the core functions of the Marketplaces, including eligibility and enrollment responsibilities, it is unlikely that state involvement would transform actions taken by partnership Marketplaces into actions taken “under color of state law.” Even in the state-based Marketplaces, potential plaintiffs may face difficulty characterizing the actions of the Marketplaces as clearly “state” or “federal.” This is because even within the state-based Marketplaces federal agencies play a significant role. First, in order to verify an individual’s immigration status, social security number, and residency, Marketplaces must seek verification from various federal agencies, including HHS, the Social Security Administration, and the Department of Homeland Security. 372 If an individual seeks to challenge the verification procedures or the information provided by the federal agency, this may be considered federal action, rather than action “under color of state law,” even if a state-official requests the verification.
Second, states have the option to utilize the HHS federal appeals entity in several instances. Appeals to the HHS appeals entity are available after exhaustion of a state-based appeals system. 373 Alternatively, if a state has not established an appeals system, the appeal may proceed directly to the HHS appeals entity. 374 State-based Marketplaces also have the option to delegate a subset of appeals—those seeking exemptions from the penalty for not having insurance—to the HHS appeals entity. 375 This is a novel structure where the federal government has delegated authority to the states, only to allow the states to re-delegate back to the federal agency. But this structure will make it difficult to assess who is accountable when individuals do not receive notice or a response to an appeal. Imagine an individual who requests an appeal in a state where either the state has failed to establish an appeals process or the appeal has been delegated to HHS. If the individual never receives acknowledgement of the appeal request, the individual will not know whether the state failed to send the information to HHS, or whether HHS received the information but failed to process it. Individuals would need to use different causes of action, likely § 1983 and an APA claim, to review HHS’ inaction in order to name both defendants and bring both parties into the suit.
Belknap Hous. Auth., 719 F.2d 979, 982 (9th Cir. 1983) (holding that housing authority created by Indian tribal law pursuant to federal statute did not act under color of state law); but see Tongol v. Usery, 601 F.2d 1091, 1097 (9th Cir. 1979) (“[T]he actions of state agencies administering federally-funded programs have been held to be actions undertaken under color of state law for the purposes of section 1983.”) (citing Green v. Dumke, 480 F.2d 624, 628 (1973)).
372. See 45 C.F.R. § 155.315(c) (2014).
373. See 45 C.F.R. § 155.505(c)(2)(i) (2014).
374. See 45 C.F.R. § 155.505(c)(2)(ii) (2014).
375. See 45 C.F.R. § 155.625(b); 45 C.F.R. § 155.505(c)(2)(iii) (2014).

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