Federal Judge Rules Against Association Health Plans
A final rule released last year that allowed for the proliferation of association health plans (AHPs) that do not comply with requirements in the Affordable Care Act (ACA) was ruled illegal by a District Judge last week. AHPs allow small businesses and trade groups to band together to purchase health insurance plans that are exempt from many critical ACA consumer protections, such as the requirement to provide certain health benefits which include mental health and substance use disorder treatment, and to do so at parity with physical and surgical health benefits. The National Council applauds U.S. District Judge John D. Bates for reversing these harmful AHPs.
The final rule on AHPs was a result of a 2017 executive order President Trump signed that directed federal agencies to loosen restrictions on AHPs and short-term health insurance to create less comprehensive coverage options. During the rule’s comment period, the National Council raised serious concerns with how these changes would negatively impact American’s access to high-quality, affordable health coverage. Once the rule was finalized, 11 states and the District of Columbia filed the lawsuit that was concluded last week. In his ruling on the case, Judge Bates wrote that “the Final Rule is clearly an end-run around the ACA. Indeed, as the President directed, and the Secretary of Labor confirmed, the Final Rule was designed to expand access to AHPs to avoid the most stringent requirements of the ACA.” Additionally, Judge Bates determined that the Labor Department’s final rule exceeded the statutory authority of the Employee Retirement Income Security Act (ERISA), which sets the standards for employer-provided health plans.
This ruling against Trump Administration policies landed the same week that another district court judge blocked Medicaid work requirements in Kentucky and Arkansas, another initiative championed by the Administration.