By Justin Giovannelli and Kevin Lucia
Last June, the Department of Labor (DOL) issued a groundbreaking regulation that made it easier for association health plans (AHPs) to offer coverage that is exempt from key provisions of the Affordable Care Act (ACA). AHPs have a “colorful and troubling history,” and the administration’s new, more lax approach to these plans has made it more likely that consumers will fall victim to health plan insolvencies and scams. The rule also reversed decades of DOL precedent for how to regulate AHPs and was quickly challenged on legal grounds. Late last month, a federal court in Washington, D.C., invalidated the rule’s major provisions, concluding that the regulation was a “clear . . . end-run around the ACA” and was inconsistent with federal law.
The court decision, which took immediate effect and hasn’t so far been appealed, removes the legal cover the administration had sought to extend to AHPs to circumvent the ACA. In a new work for The Commonwealth Fund, we identify the legal and regulatory steps the administration may take in response to the ruling and examine the implications of the decision for AHPs formed under the now-invalidated policy, their enrollees, and state regulators and policymakers. You can access our full analysis at The Commonwealth Fund.