Skip to main content
Sister Publication Links
  • ESG: THE NEW IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Digital Health
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Supply Chain
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE +
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Government
July 26, 2018 01:00 AM

Democratic attorneys general sue to block association health plan rule

Harris Meyer
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Twelve Democratic attorneys general sued the Trump administration Thursday to block a new rule making it easier for small firms and individuals to band together in association health plans free from many Affordable Care Act market rules.

    The suit, filed in U.S. District Court for the District of Columbia, alleged that the final rule issued by the U.S. Department of Labor last month violated the ACA, the Administrative Procedure Act, and the Employee Retirement Income Security Act.

    This represents the latest legal effort to block Trump administration moves to roll back coverage expansions and consumer protections under the ACA. Last month, advocacy groups won a federal ruling invalidating the CMS' approval of Kentucky's Medicaid waiver requiring beneficiaries to work, go to school or participate in volunteer activities.

    Administration officials and some small-business groups say the association health plan rule will give small businesses and self-employed individuals access to leaner, cheaper health plans. But many insurance experts warn it will siphon younger and healthier groups and individuals out of the ACA-regulated market, driving up rates.

    In addition, regulators say it will lead to a spike in insurance fraud and insolvencies that plagued consumers and healthcare providers in the past.

    The lawsuit argues the purpose of the rule is "undo" the progress states have made under the ACA in decreasing uninsured rates, ensuring comprehensive coverage, and stabilizing the individual and small-group insurance markets. Plus, the attorneys general say the rule will harm the states by forcing them to devote resources to policing a flood of inadequate or fraudulent plans offered by associations.

    "The Trump administration is once again waging an assault against the fundamental rights of Americans to have access to safe, high quality, affordable healthcare," New York's Democratic Gov. Andrew Cuomo, whose state joined the suit, said in a written statement.

    But Christopher Condeluci, a Republican healthcare lobbyist and former Senate staffer, said the Labor Department complied with the Administrative Procedure Act in issuing the rule. Court precedent, he added, allows the agency to modify its previous interpretive rules defining employers that can band together in associations to buy health insurance.

    The attorneys general allege the Labor Department unlawfully redefined the term employer to expand the class of large employers to include groups formed for the primary purpose of selling health insurance, which previously had been illegal.

    In addition, the attorneys general said the rule violates the ACA, ERISA and case law by letting self-employed individuals with no other employees participate in association plans, putting their health and financial security at risk.

    The suit also claimed the rule conflicts with ACA protections for small employers and individuals because association plans are not required to cover all the ACA's essential benefits and they can set premiums based on members' age and health status.

    Both the administration and independent analysts project that as many as 4 million Americans will leave the ACA-regulated individual and small-group markets over the next five years to join association health plans. Experts say that could seriously weaken the ACA markets and drive up premiums for people who want to buy comprehensive plans with ACA consumer protections.

    Provider and insurance groups are leery of association health plans, warning that they could leave patients, physicians and hospitals on the hook for unpaid medical bills that should have been picked up by association plans.

    There is a long history of shady and inept operators of association health plans and related multiple employer welfare arrangements, with dozens of civil and criminal enforcement actions at the state and federal levels.

    The U.S. Government Accountability Office identified 144 "unauthorized or bogus" plans from 2000 to 2002, covering at least 15,000 employers and more than 200,000 policyholders, leaving $252 million in unpaid medical claims. Some were run as pyramid schemes, while others charged too little for premiums and became insolvent.

    Citing ERISA, abusive operators of association health plans often have taken advantage of unclear lines of regulatory authority between the states and the federal government. Patients have had to file for bankruptcy to escape providers' claims for large unpaid bills.

    Such cases have declined since the ACA made health insurance more affordable and accessible for employers and individuals without access to large-group coverage.

    The states joining the suit are California, Delaware, Kentucky, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Virginia and Washington, plus the District of Columbia.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Hospital systems finance 3
    Mississippi lawmakers consider easing restrictions on public hospitals
    Biden COVID_i.jpg
    Biden to end COVID emergency declarations on May 11
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Modern Healthcare Alert: Sign up for this breaking news email to be kept in the loop as urgent healthcare business news unfolds.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Digital Health
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Supply Chain
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE +
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing