Federal Court Strikes Down AHP Rules
On March 28, 2019, a federal district court invalidated key parts of the Trump administration’s 2018 final rule on association health plans (AHPs). The court directed the Department of Labor (DOL) to consider how the remaining provisions of the final rule are affected by its decision.
In its ruling, the court stated that the final rule was an “endrun” around the Affordable Care Act (ACA) and that the DOL exceeded its authority under ERISA. The court specifically struck down two parts of the final rule:
- The provision defining “employer” to include associations of disparate employers; and
- The provision expanding membership in these associations to include working owners without employees.
Next Steps for Employers
Employers and working owners that have joined an AHP, or are considering doing so, should consider how these plans may be affected by the court’s ruling. According to the DOL, participants in AHPs affected by the court’s decision have a right to benefits as provided by the plan or policy, although these plans may change their rules going forward.