On Thursday, a U.S. District Judge ruled against the Trump administration’s efforts to expand on association health plan rules. The Trump administration had developed a final rule that allows for association health plans to be developed by associations and employers, which the judge has ruled that it is beyond the Trump administration’s authority under the Employee Retirement Income Security Act (ERISA).
Association health plans operate by allowing small businesses to work together to obtain healthcare coverage on the same scale as a single large employer, strengthening negotiating power with providers due to their large combined scale. Association health plans allow for less expensive coverage for employees of small businesses, as well as allowing for self-employed owners and their families to join association health plans, giving them a new path to health coverage.
Judge John Bates had ruled that the final rule for association health plans ignores the purpose of the ERISA and ACA. For stability in the health insurance markets, health plans competing to enroll the same participants must operate under the same rules. Allowing for association health plans to be developed separate from those health plans in the health insurance market develops a new segment that can drive individuals away from major health plans.
According to Judge John Bates, the ability for two working owners to develop an association health plan with no workers was an “unreasonable interpretation of ERISA” that “creates absurd results.”
Read the original article from Modern Healthcare here.