The Trump Administration suffered another loss in the courts in its attempts to diversify the type of plans consumers can purchase when U.S. District Court Judge John Bates, a George W. Bush appointee, ruled late Thursday that the Administration’s efforts to expand the availability of health plans that don’t meet the coverage rules of the ACA, and arguably violate ERISA, is a deliberate and illegal “end run” around the federal healthcare law. The ruling specifically addressed Association Health Plans, which can often cost less than many ACA plans but can also provide fewer health benefits.|
Judge Bates specifically cited what many believe to be a direct violation of ERISA in the AHP rule’s attempt to change the definition of employer to allow an association to be formed for the sole purpose of offering health insurance – as long as one other service is provided to members – and to allow working owners with no employees to be counted as both the employer and employee in joining a group AHP. ERISA, signed into law by President Ford in 1974, established standards for private-sector pension, health and other employee benefit plans, increasing protections for plan participants and their families. The contradiction to ERISA that the AHP rule includes has been a main concern of employee benefit specialists who do not want to see an erosion of ERISA that has protected employees for over four decades. This is an aspect of the AHP rule that NAHU pointed out in our comments when the AHP rule was proposed.
It is not immediately clear if the Administration would appeal the ruling. Christopher Condeluci, a health policy consultant who has worked with business groups to launch AHPs, believes the Administration will appeal and doesn’t think the ruling will stop those groups from moving forward with the plans they have already established. Currently, two of the three staggered implementation dates have passed: September 1, 2018, allowing for any new or existing associations to establish a fully insured AHP, and January 1, 2018, allowing existing associations that sponsored an AHP on or after the date of the final rule to establish a self-funded AHP. The final implementation date is fast approaching on April 1 that will allow all other associations (new or existing) to establish a self-funded AHP. As of now, we advise all NAHU members that the final rule issued by the Trump Administration is still in effect as we wait for the ruling to go through the court system.