White House

Judge blocks Trump’s rule to expand insurance plans that don’t meet ACA requirements

The rule, finalized last year, allows small businesses and the self-employed to band together to buy association health plans

Supporters hold up Save Medicaid signs during the Senate Democrats’ news conference at the Capitol with disability advocates to oppose the Republicans’ Graham-Cassidy health care bill on Tuesday, Sept. 26, 2017. (Bill Clark/CQ Roll Call file photo)

The Trump administration suffered another blow to its health care agenda in federal court on Thursday when a district court judge said a rule to expand insurance plans that do not have to meet all of the requirements under the 2010 health care law is invalid.

U.S. District Judge John D. Bates blocked a rule that was finalized last year that allows small businesses and self-employed people to band together to purchase insurance known as association health plans.

Bates, who was appointed by President George W. Bush, called the final rule an “end-run” around the health care law.

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“Indeed, as the President directed, and the Secretary of Labor confirmed, the Final Rule was designed to expand access to AHPs in order to avoid the most stringent requirements of the ACA,” he wrote, using the acronym for the 2010 health care law.

At issue in the lawsuit was whether a group of different employers could be described as one under the Employee Retirement Income Security Act, known as ERISA, which sets the standards for employer-provided health insurance. Bates said he agreed with states challenging the rule that the Department of Labor stretched the definition of the “employer.”

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The rule was first called for in an October 2017 executive order from President Donald Trump instructing several departments to promulgate rules that would allow less expensive insurance plans that did not comply with the 2010 health care law’s requirements, such as having to cover 10 categories of benefits.

The lawsuit was brought by New York, 10 other states and the District of Columbia last year.

A separate Trump administration rule expanding the duration of another type of health plan that bypasses the law’s requirements, short-term insurance plans, also faces a lawsuit pending in the U.S. District Court for the D.C. Circuit. Democrats have slammed the administration for “sabotaging” the health care law through regulations that promote “junk” insurance, and short-term plans have drawn more of their ire than the association plans.

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Republicans on Capitol Hill pointed to association health plans this week as their policy alternative for more affordable health care than the plans sold under the Democrats’ health care law.

“These association health plans, the number of people that are signing up for them is pretty big,” Wyoming Republican Sen. John Barrasso told reporters before the ruling came out on Thursday.

A January analysis of association health plans by the website AssociationHealthPlans.com found that 28 of the plans had recently launched in 13 states and that the plans generally offered comprehensive coverage and cost savings for businesses.

Bates’ ruling comes after an intense week in the courts for the administration’s health care policies. The administration on Monday told the Fifth Circuit Court of Appeals that it agrees with a lower court ruling that the entire 2010 health law should be struck down. Another judge on Wednesday struck down efforts in Kentucky and Arkansas to place work requirements on some Medicaid enrollees.

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