A judge for the US District Court for the District of Columbia on Thursday ruled that attempts to expand access to health insurance plans that do not satisfy Affordable Care Act (ACA) regulations are unreasonable and illegal.
US District Judge John Bates concluded that attempts to increase access to Association Health Plans, which provide fewer essential health benefits, violate both ACA’s stringent requirements and the Employee Retirement Income Security Act (ERISA).
This violation results from the Department of Labor’s (DOL) Final Rule, which tried to expand the definition of employers. If the Final Rule had been permitted, it would have relaxed requirements for qualifying “bona fide associations,” allowing small employers to aggregate and avoid small-group market requirements. The DOL was encouraged to allow this broad definition of employers by President Donald Trump’s 2017 Executive Order, “Promoting Healthcare Choice and Competition Across the US.”
Bates found that the DOL misinterpreted ERISA and ACA, stating:
The court cannot believe that Congress crafted the ACA, with its careful statutory scheme distinguishing rules that apply to individuals, small employers, and large employers, with the intent that fifty-one distinct individuals employing no others could exempt themselves from the individual market’s requirements by loosely affiliating through a so-called ‘bona fide association’ without real employment ties.
This ruling prevents small businesses and those who are self-employed from buying health care plans on the large-group market. The court also remands the DOL’s Final Rule back to the agency for further consideration.