Federal Judge Strikes Down Large Portions of the New Association Health Plan Rule

Federal Judge Strikes Down Large Portions of the New Association Health Plan Rule

On March 28, 2019, a federal district court invalidated critical sections of the Trump Administration’s final rule expanding the types of allowable association health plans (AHPs). Judge John D. Bates ruled in State of New York v. The United States that the Department of Labor (DOL) exceeded its statutory authority under the Employee Retirement Income Security Act (ERISA), and sent the remaining portions of the rule back to the DOL for further action.  In response, the Trump Administration issued new guidance detailing its initial reaction to the decision and providing answers to questions that may arise as a result.

This will likely bring to a halt implementation of AHPs formulated under the new rules nationwide, at least for the immediate future. The Trump Administration stated that they are exploring all of their options in the case (which include both an appeal and asking either the current judge or the appeals judge to stay the ruling and allow new AHP plans to continue development while the case moves forward). Prior to this ruling, however, Pennsylvania, New Jersey, and Delaware refused to adopt the Final Rule as drafted by the DOL.  As such, AHPs have not experienced the kind of traction in our region as they have in other parts of the country.  As always, Kistler Tiffany Benefits will continue to track developments to keep our clients informed.

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