A much-anticipated federal appeals court ruling could erase some significant legal hurdles impeding the formation of association health plans (AHPs).

The D.C. Circuit Court of Appeals heard oral arguments in November in the Trump administration’s appeal of a lower court ruling that invalidated the Department of Labor’s 2018 rule expanding access to AHPs. Associations are anxiously awaiting the appeals court’s decision, expected to come early this year.

The district court decision, announced last March, sided with attorneys general from 11 states and the District of Columbia, calling the DOL’s AHP rule an “end run” around the Affordable Care Act (ACA). However, at least 30 other states have taken action to conform to the final AHP rule in some way, including issuing guidance, enacting legislation, or simply approving AHP formation—evidence that a majority of the states think that the DOL acted reasonably in developing and issuing the regulations.

ASAE and the Coalition to Protect and Promote AHPs filed an amicus brief in June in support of the rule, arguing that AHPs are subject to—and comply with—the ACA’s coverage requirements, ERISA’s consumer protections, and state regulatory requirements. AHPs offer broader healthcare provider networks than many existing ACA small-group and individual market plans, the coalition argued, and are priced at an actuarially fair premium for both young and old participants.

“Importantly, AHPs are covering all 10 of the ACA’s ‘essential health benefits.’ AHPs also cover pediatric dental and vision services either through their AHP insurance contract or through a stand-alone product,” the coalition said in a statement. “The bottom line is that AHPs are offering comprehensive and affordable health coverage to employees of small employers and self-employed individuals, and these arrangements are not an ‘end run’ around any federal or state law, despite recent assertions.”

A favorable outcome in the federal appeals court could keep dozens of existing AHPs from shuttering and enable small businesses and the self-employed to switch from expensive individual marketplace coverage to a more affordable—and still comprehensive—association plan.

Chris Vest, CAE, is director of public policy at ASAE. Email: cvest@asaecenter.org

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