Health Care

House Dems, Others Assail Association Health Plan Rule

High-ranking House Democrats, Ivy League professors and a group of medical associations are among the latest to urge the D.C. Circuit to uphold a Washington, D.C., federal judge’s March decision to gut a Trump administration rule expanding access to association health plans.

The flurry of amicus briefs submitted Monday underscores the importance of the case, which asks the D.C. Circuit to decide whether small businesses and individuals should be able to eschew buying health insurance from the Affordable Care Act’s individual and small-group markets in favor of joining association health plans, which are typically sold on the large-group market.

Ten members of the U.S. House of Representatives’ Democratic leadership, including Speaker Nancy Pelosi and Majority Leader Steny Hoyer, said U.S. District Judge John Bates correctly found that the regulation violates the Affordable Care Act.

“The ACA was structured to distinguish between small group and individual markets on the one hand, and the large group market on the other, and the new rule eviscerates that distinction in a manner that violates the text of the ACA and undermines Congress’s plan in passing it,” the Democrats wrote in their brief.

Judge Bates also ruled that the regulation violated the Employee Retirement Income Security Act, a holding that a coalition of lobbying groups that represent workers, the elderly and people with disabilities referenced in their amicus brief in support of the judge’s decision.

The groups — which included the National Women’s Law Center and the National Employment Law Project — accused the federal government of trying to sabotage the ACA by creating an unlawful interpretation of ERISA’s definition of “employer.”

“[The U.S. Department of Labor] seeks to exploit the definition of ‘employer’ in the Employee Retirement Income Security Act of 1974 to undo what Congress has done,” the groups said in their brief.

Also speaking out against the rule were a group of 36 professors from universities such as Yale, Harvard and Columbia and policy wonks from groups like the Urban Institute and Brookings Institution.

In addition to praising Judge Bates’ opinion as legally sound, the academics and researchers spoke to the potentially harmful effects of allowing the AHP rule to stay on the books — namely, damage to the ACA’s individual and small-group markets.

“AHPs can offer lower premiums by attracting low-risk consumers. This will leave the ACA regulated small group and individual markets with higher cost enrollees and higher premiums,” the professors and researchers wrote.

Also weighing in to support Judge Bates’ ruling were a group of medical associations, including the American Medical Association and the American College of Physicians, which said the rule would “undermine the consumer protection provisions in the Affordable Care Act, leaving patients vulnerable to worse health outcomes and/or financial ruin.”

Several ex-DOL officials supported the ruling as well, saying the agency has never interpreted ERISA’s “employer” definition in the way the Trump administration is now asking it to. Joining the ex-officials were a group of former state insurance commissioners, who said association health plans have a history of financial instability and fraud and expanding them is a bad idea.

The final group to urge the D.C. Circuit to side with Judge Bates was the Small Business Majority Foundation, a lobbying group that represents small businesses. The group argued that contrary to the framing of the rule, the regulation wouldn’t be a good thing for small businesses.

“The final rule might make it easier for a select number of small businesses with younger, healthier employees to purchase association health plans, but those marginal gains would come at a huge systemic cost to the stability of the health insurance markets as a whole,” the group said. “Much of the ACA’s gains for small businesses and their employees will be undone if the district court’s judgment is reversed.”

The association health plan rule was finalized in June 2018. California, Delaware, Kentucky, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Virginia, Washington and Washington, D.C., sued the federal government one month later. Judge Bates sided with the states in March.

The federal government was not immediately available for comment Monday.

The House Democrats are represented by Elizabeth B. Wydra, Brianne J. Gorod and Ashwin P. Phatak of the Constitutional Accountability Center.

The National Women’s Law Center, National Employment Law Project, National Partnership for Women and Families, National Health Law Program, United Hospital Fund, Families USA and Public Citizen are represented by Nandan M. Joshi and Allison M. Zieve of Public Citizen Litigation Group.

The professors and researchers are represented by Geoffrey H. Simpson of Webster & Frederickson PLLC.

The medical associations are represented by Chad I. Golder of Munger Tolles & Olson LLP.

The former U.S. Department of Labor officials are represented by Karen L. Handorf of Cohen Milstein Sellers & Toll PLLC.

The former state insurance commissioners and former state insurance regulators are represented by David Branch of Law Office of David A. Branch and John M. Morrison of Morrison Sherwood Wilson & Associates PLLC.

Small Business Majority Foundation Inc. is represented by J. Carl Cecere of Cecere PC.

The plaintiff states and the District of Columbia are represented by their respective attorneys general.

The Labor Department is represented by Michael Shih of the U.S. Department of Justice‘s Civil Division.

The case is State of New York et al. v. U.S. Department of Labor et al., case number 19-5125, in the U.S. Court of Appeals for the District of Columbia Circuit.

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