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Challenge to obama care began in federal court this week as a group of business owners and individuals from states who opted out of creating a state exchange are fighting an irs regulation which theybelieve is unlawful, financially damaging and exposes them to massive employer and individual obligations. david cleminsic of west virginia is one of the plaintiffs who says he will be affected. >> i'm a sole proprietor in a retail shop in a very small community, population 385, i believe it is now, and there's not a lot of customer base to grow for expansion. there's enough to maintain. i'm happy ...

Exchange. michael canon is director of health policy studies at the cato institute. >> if the federal government establishes the exchange, those subsidies are not available, which means the subsidies aren't there to trigger penalties against employers and those individuals. so, what the obama administration is doing is saying, no, we're going to offer those subsidies in the 34 states that have refused to establish an exchange. the law does not allow them to do that. but when they do that, if they get away with it, then those subsidies will trigger, those illegal subsidies, will trigger illegal...

Challenge to obama care began in federal court this week as a group of business owners and individuals from states who opted out of creating a state exchange are fighting an irs regulation which they believe is unlawful, financially damaging and exposes them to massive employer and individual obligations. david cleminsic of west virginia is one of the plaintiffs who says he will be affected. >> i'm a sole proprietor in a retail shop in a very small community, population 385, i believe it is now, and there's not a lot of customer base to grow for expansion. there's enough to maintain. i'm happy...

Exchange. michael canon is director of health policy studies at the cato institute. >> if the federal government establishes the exchange, those subsidies are not available, which means the subsidies aren't there to trigger penalties against employers and those individuals. so, what the obama administration is doing is saying, no, we're going to offer those subsidies in the 34 states that have refused to establish an exchange. the law does not allow them to do that. but when they do that, if they get away with it, then those subsidies will trigger, those illegal subsidies, will trigger illegal...