What Does the Latest Federal Court Decision Mean for Association Health Plans – and the States that Regulate Them?

On March 28, the Federal District Court for the District of Columbia invalidated the U.S. Department of Labor’s (DOL) Association Health Plan rule. The Court found that DOL had exceeded its authority under ERISA by failing to set meaningful limits on AHPs. In particular, the Court took issue with the provision that allows AHPs to be formed solely on the basis of geography or for the purpose of selling insurance. Further, the Court found that Congress did not intend for self-employed individuals (“working owners”) without employees to be considered employers under ERISA.

What does this ruling mean for existing AHPs that have been formed under the recent federal rules? How should state insurance departments, which retain the primary authority for regulating AHPs, respond to questions about the ruling? In her latest “Expert Perspective” for the Robert Wood Johnson Foundation’s State Health & Value Strategies project, CHIR’s Sabrina Corlette provides an update on the ruling and implications for state regulators. Read the full post here.

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