396 Holding Health Insurance Marketplaces Accountable 2015
Therefore, despite attempts by some state legislatures to distinguish the
state-based Marketplaces from state agencies, the test will turn on what
functions the Marketplaces perform and how much control state governments exert over the Marketplaces. There are many parallels between the
Marketplaces and Amtrak. First, like Amtrak, the Marketplaces are created
by statutes with the explicit goal of furthering important governmental
functions. In fact, several statutes explicitly acknowledge the public functions of the Marketplaces. For example, the Connecticut Marketplace was
“created for the performance of an essential public and governmental func-
tion.”434 Second, several Marketplaces claim to possess rulemaking authori-
ty,435 though others are definitively deny rulemaking authority.436 Whether a
Marketplace claims rulemaking authority has no correlation with whether
the state chose to structure its Marketplace as a state agency or declared it
independent from the state. For example, despite Hawaii’s clear statement
that the Marketplace is not a state agency, the implementing legislation requires the governing board to “adopt rules to implement the provisions of
this chapter.”437 The ability to promulgate rules is clearly an exercise of
governmental authority, so it is curious that an entity explicitly distinguished from the state could exercise this kind of governmental authority.
Finally, like Amtrak, the Marketplaces’ board members are almost all appointed by state governors, often requiring approval from the state legisla-
ture.438 Therefore, under this test, the Marketplaces might simply be considered “government entities,” rather than private entities contracting with the
entities are subject to constitutional obligations.
Courts have unquestioningly shifted this test to the states when evaluating whether state-based quasi-private entities are subject to constitutional obligations under § 1983. See
Nahmod, 1 Civil Rights & Civil Liberties Litigation: The Law of Section 1983 § 2:5. But, §
1983 protects constitutional, statutory, and, this article argues should protect regulatory
rights. Courts do not seem to distinguish based on the source of the right when applying
Lebron to evaluate what is “under color of state law.” See Nahmod, 1 Civil Rights & Civil
Liberties Litigation: The Law of Section 1983 § 2:5. The courts’ approach seems to be the
logical conclusion of the Lebron reasoning. § 1983 is intended to protect federal rights, and
therefore states should not have the ability to exempt state-entities from federal-law obligations, even when those federal rights derive from non-constitutional sources.
434. CONN. GEN. STAT. ANN. § 38a-1081(a) (West).
435. DASH ET AL., supra note 166, at 10.
436. COLO. REV. STAT. ANN. § 10-22-104 (West) (“The board does not have the authority to promulgate rules pursuant to the ‘State Administrative Procedure Act’, article 4 of
title 24, C.R.S.”).
437. HAW. REV. STAT. § 435H-10 (West 2014).
438. See infra Appendix.