(Bloomberg) Indiana can challenge an Internal Revenue Service rule making people who sign up for health-care coverage under the Affordable Care Act through federal government-created insurance exchanges eligible for a tax credit.

U.S. District Judge William T. Lawrence in Indianapolis denied Tuesday an IRS bid to dismiss that portion of the state’s 2013 lawsuit, in which it claimed the rule illegally conflicts with a provision of the federal law limiting those tax credits to enrollees in state-created exchanges.

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