Judge Rules Trump's DOL Tried to Create "End Run" Around ACA With Association Health Plans

Another federal district court judge has handed the Trump administration a major defeat this week in its attempts to redo rules about US health insurance, saying that its efforts to expand association health plans (AHPs) were “clearly an end-run” around the Affordable Care Act (ACA).

The rule was enacted last year and allowed small businesses and self-employed individuals to band together to purchase health insurance, fulfilling a campaign promise by the president to make it easier to sell insurance across state lines.

President Trump issued an executive order in October 2017 calling for the Department of Labor (DOL) to expand access to the plans, which do not have to be compliant with the regulations of ACA plans.

New York led a lawsuit with 10 other states and the District of Columbia against the labor department, alleging that DOL violated the Administrative Procedure Act when it promulgated the AHP rule, and argued that the rule violates both the ACA and the Employee Retirement Income Security Act (ERISA). The DOL unlawfully reversed decades of agency and judicial interpretation of ERISA’s key terms, the lawsuit alleged, with the main goal to sabotage the ACA.

In his ruling, US District Judge John D. Bates of the District of Columbia agreed, writing that the department’s “expansion of the term “employer” under ERISA

to include working owners without employees (when organized in an association) is unreasonable because it is contrary to ERISA’s text and purpose.”

The DOL’s interpretation is unsupported by Supreme Court case law as well as from other courts and is, in fact, and effort to rewrite the law, the ruling said.

The judge also wrote that the interpretation “creates absurd results under the ACA.”

In a statement, New York Attorney General Letitia James called the ruling “a historic win.”

“We are pleased that the District Court saw past the Trump Administration’s transparent effort to sabotage our healthcare system, and gut these critical consumer protections in the service of its own partisan agenda,” she said. “This victory will help ensure better health care for millions nationwide.”

Earlier this week, another federal judge tossed out work requirements created by Kentucky and Arkansas for people to receive Medicaid benefits, writing in separate opinions that HHS approval of both programs failed to consider the core purpose of Medicaid—to provide healthcare for the needy. Both programs, which were approved under waivers, were remanded to HHS for another look.