Recently the Department of Labor (DOL) issued final rules on Association Health Plans (AHPs) that expanded the opportunity for small employers and even independent contractors to come together to purchase group insurance.
A coalition of states has now sued the DOL challenging the final AHP rules, claiming that they exceeded their authority under both the ACA and ERISA. Specifically, the states argue that the DOL ignored the intent of Congress by undermining the ACA’s distinct set of rules for the individual, small, and large group markets. In addition, the states argue that the new rules improperly set aside established ERISA principles by making it easier for unrelated employers to purchase insurance together, and for working owners without a single common law employee to participate in a group health plan.
The lawsuit asks the court to declare the AHP rule invalid and prevent the DOL from implementing and enforcing it. As with other ACA-related lawsuits, it will take some time for this case to make its way through the system. Alliant will monitor and report on the progress of the litigation and those entities that have taken steps or are considering establishing an AHP under the new rules should likewise remain engaged on this issue.