Mass. Employers May Sue Feds Over Obamacare Small-Business Premiums

WBUR's Martha Bebinger reports:

The state's largest employer group says it may sue the federal government over a provision in Obamacare that will hike premiums for some small businesses.

The federal health care law changes the way individual and small business insurance rates are calculated.

The Obama administration agreed to let Massachusetts phase in the new system, but said in a letter today that the state must eventually comply.

Under the changes, some employers will see their rates drop, but others may see dramatic increases.

The employer group, Associated Industries of Massachusetts, posts its reaction to the letter on its blog here, including this:

Associated Industries of Massachusetts is gravely disappointed with the decision and will now consider other remedies to help employers, including legal action or supporting legislation to de-merge the insurance market for individuals and small companies.

And here's a chunk of the denial letter from Secretary of Health and Human Services Kathleen Sebelius to Gov. Deval Patrick: