A proposed bill in South Carolina stands to pit the state and federal governments against one another on ObamaCare—potentially leaving small businesses, hospitals and insurers in the Palmetto State blazed and confused in the crossfire.

The ObamaCare nullification bill, H.3101, would render the Affordable Care Act powerless in the state, and also offer businesses and individuals a tax deduction to offset the IRS’ penalty for choosing to not insure workers or themselves. The bill  is on special order in the state Senate, if it isn’t addressed by end-of-day Thursday it will be on the backburner until January.

States were given the purview to vote and implement certain portions of the Affordable Care Act, which was largely upheld in a historical Supreme Court case last June. South Carolina already has opted not to offer insurance via state-run exchanges.

Sen. Kevin Bryant, R-Anderson, is leading the nullification charge, and says the state can afford the tax deduction budget in the bill of between $2 and $3 million to individuals and businesses. The bill, if passed in the state, will undoubtedly wind up in federal court, he said.

“Many fear this piece of legislation will wind us up in federal court,” Bryant said. “Our attorney general has agreed to defend South Carolina at all costs. I think other states are starting to take notice and tell the federal government, ‘you are doing way too much and stepping outside your federal authority.’”

The original bill had criminal penalties for those who implemented the law within the state, and allowed the state’s attorney general to penalize any business, insurer, state employee or hospital, that was enforcing it, however, that portion of the bill was removed in the Senate’s version.

Sen. Larry Martin, R-Pickens, chairman of the Senate Judiciary Committee, said in the short term the proposed legislation may confuse local businesses, but it doesn’t have much long-term potential.

“The federal law, when it’s upheld by the U.S. Supreme Court, it’s the law of the land,” Martin said. “If the South Carolina Legislature passes a bill that in some way tells businesses to do something different than federal law, the ink won’t be dry on the bill before it is heard in a federal court.”

Nexsen Pruet’s Bob Coble, a South Carolina attorney representing a network of hospitals in the state, said there is a good chance the bill will pass, and it will leave his clients extremely confused and uncertain as to how and if they should implement the law. Coble says doctors and hospitals that rely on the Affordable Care Act to get reimbursement from Medicare and Medicaid, private and insurers and small businesses all stand to be impacted.

“The ACA, on a good day, is the most complicated issue we face in the U.S.,” said Coble. “This at minimum, means the federal government says you must do something and the state says you can’t do it.”

It’s like one parent, the federal government, and the other, South Carolina’s state government, telling their kid to do two different things, he said.

“And with money at stake,” Coble said. “It’s not just about ‘using the car on a Friday’ but there’s also a lot of money at stake during the battle.”

Frank Knapp, president and CEO of the South Carolina Small Business Chamber of Commerce, said most small businesses in the state haven’t gotten wind of the bill yet, and he is not positive it has the votes to pass.

“They can debate it, but the law of ObamaCare has been deemed to be constitutional by the U.S. Supreme Court, which is the only body in the nation which can deem something unconstitutional or constitutional,” Knapp said.

Instead, Knapp said the move by state senators is more symbolic and will only bolster campaigns for next year.

“It’s frivolous, and it’s showmanship of beating one’s chest and saying, ‘I took on the President of the United States,’” said Knapp. “I think most business people know that the constitution is the law of the land here.”

The ACA is confusing enough as it stands to small businesses, Knapp said. Time would be better spent accepting this is the law of the land and explaining to businesses how this will impact them, he said.

“There is enough confusion out there, and this adds another layer to the confusion,” he said. “If they wanted to help the current situation, they should communicate what the law requires of the business community, so they can help implement it. Ninety-seven percent of businesses in the state are at 50 employees or under, so you don’t have a whole heck of a lot left that will be facing a decision of whether or not to offer coverage.”

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