THE DEPARTMENT OF LABOR APPEALS RULING INVALIDATING ASSOCIATION HEALTH PLAN RULE

The Department of Labor has announced that it plans to appeal United States District Court Judge John D. Bates’s decision invalidating the Association Health Plan (AHP) Final Rule to the DC Circuit Court of Appeals.

The AHP Final Rule was designed to allow small employers and individuals to join together to purchase health plans that would be less expensive because they would be considered large employers exempt from many of the Affordable Care Act’s (ACA) requirements, including the requirement to offer all of the Essential Health Benefits. The AHP Final Rule had been challenged by a group of eleven states and the District of Columbia, who argued that the Final Rule violated both the ACA and ERISA.

In striking down the AHP Final Rule, the Court agreed with the states, finding that: “The Final Rule was intended and designed to end run the requirements of the ACA, but it does so only by ignoring the language and purpose of both ERISA and the ACA.” Elsewhere, the Court stated: “Indeed, as the President directed, and the Secretary of Labor confirmed, the Final Rule was designed to expand access to AHPs in order to avoid the most stringent requirements of ERSIA.”

After Judge Bates’s ruling, several Republican Senators introduced a bill, S 1170, which would allow small businesses and the self-employed to offer AHPs. The bill has been assigned to the Senate’s Health, Education, Labor and Pensions Committee.

Whatley Kallas, LLP continues to follow developments regarding AHPs. For our previous article on the AHP Final Rule, click here, and for the previous article on Judge Bates’s ruling, click here.