Federal judge rejects expansion of association health plans

A federal judge rejected the Trump administration’s efforts to expand access to association health plans March 29, throwing small businesses that rely on those plans into a state of uncertainty, the Washington Post reported.

U.S. District Judge John D. Bates said association health plans, which allow small business owners and sole proprietors to band together and buy insurance at discounted rates, were “clearly an end-run” around Affordable Care Act provisions and violated the ACA. Association health plans have only been in play for around six months, but companies who did take action in that time are unsure of what their insurance situation will look like if those plans become insolvent.

In the past, policyholders have been stuck with medical bills in these cases, according to the Post. The U.S. Government Accountability Office reported that between 2000 and 2002 there were 144 plans that weren’t authorized to sell health insurance but did, resulting in more than $250 million in unpaid medical claims.

Bates backed his ruling with the comment that sole proprietors of eligible businesses could be counted as both employees and employers under association health plans, which negates established definitions under the Employee Retirement Income Security Act of 1974.

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