Excited About Association Health Plans? Not So Fast, Says New York and Massachusetts

GA Supreme Court

Many commentators and businesses welcomed the new final regulations on association health plans (AHPs) released by the US. Department of Labor (DOL) on Tuesday, (see here and here). The new rules allow small businesses and self-employed individuals to band together to purchase health insurance, even across state lines. This insurance potentially is more cost effective than the current Affordable Care Act (ACA) marketplace policies, and the policies offered to the small group and individual markets.  These policies may be less expensive because the AHPs are not required to provide all of the essential benefits required under the ACA. By limiting coverage, the AHP may offer certain small businesses the opportunity to provide health coverage to their employees, something they were not able to do in the past due to the cost of coverage.

However, yesterday, the attorneys general for New York and Massachusetts now plan to sue the Trump administration over the AHP final rule because they believe it reduces “critical consumer health protections.” As reported by Law 360, Attorneys General Barbara D. Underwood and Maura Healey, in their joint statement, stated that the new rule would “invite fraud, mismanagement and deception.” Both of these state attorneys general (and 15 other state attorneys general) previously voiced their opposition by submitting comments during the rule review process. At this time, it is uncertain whether the other 15 states will join any lawsuit filed regarding the new AHP rules.

As in the past with the ACA, the release of final regulations is quickly followed by litigation. More to come!