On December 5, 2018, the American Medical Association (AMA) and the Medical Society of the State of New York (MSSNY) filed an amicus brief in support of the states that have challenged the Department of Labor’s Association Health Plan Final Rule (AHP Final Rule). In their brief, the AMA and MSSNY argue that the “AHP Rule will be devastating to the health, well-being and pocketbooks of millions of Americans” and that the Rule is “both unwise and unlawful.” In short, the brief argues that “the AHP Rule will (1) deprive patients of essential care; (2) allow insurers to discriminate against individuals based on pre-existing health conditions; (3) destabilize the insurance markets; and (4) expose patients to fraud.”

             The AHP Final Rule allows employers to band together to form associations for the express purpose of offering health coverage if they either are (1) in the same trade, industry, line of business, or profession, or (2) have a principal place of business within a state or a metropolitan area, even if the metropolitan area includes more than one state. The intent of the Final Rule was to expand access to affordable health coverage in the individual and small group markets by allowing employers to form associations to offer health insurance, without the necessity of complying with some of the Affordable Care Act’s (ACA) key requirements. For example, AHPs are not required to cover Essential Health Benefits, such as mental health, emergency, and maternity care, and are not required to follow the ACA’s pricing rules, meaning they can set lower premiums for lower risk groups and higher premiums for higher risk groups.

             The Attorneys General from eleven states and the District of Columbia have challenged the AHP Final Rule, seeking to stop its implementation. The AMA and MSSNY brief was filed in support of the states’ motion for summary judgment. The brief relies on academic studies and position statements submitted by provider and patient groups to explain the rationale behind the ACA’s requirements and how elimination of those requirements would adversely affect not only individuals purchasing AHPs, but also the health insurance market more generally.

             Specifically, the brief argues that by removing the ACA’s requirements, the healthcare system will revert back to pre-ACA days “where Americans had no or inadequate health insurance,” that the Essential Health Benefits “are crucial for patient health, and in some cases lifesaving,” and that the AHP Final Rules could “disproportionately impact individuals with pre-existing conditions” because of the ability of AHPs to charge different premiums based on age, gender, industry, or geography. The brief also argues that the AHP Final Rule could destabilize insurance markets because healthier people would be more likely to purchase the limited coverage available from AHPs, thereby increasing the costs of more comprehensive plans sought by older and sicker individuals. Lastly, the brief argues that AHPs could expose patients to fraud because, from “the time ERISA was enacted, AHPs have been a font for scams.”

     The Court has also granted leave for the Coalition to Protect and Promote Association Health Plans to file an amicus brief. The Coalition’s brief will take the opposite position from that of the AMA and MSSNY, supporting the defendants’ contention that Court should rule in favor of continuing the AHP Final Rule. The Coalition’s brief is due by December 19, 2018.

     The case is State of New York, et al. v. United States Department of Labor, et al., Case No.: 1:18-cv-01747, pending in the United States District Court for the District of Columbia. The AMA and MSSNY’s brief is posted here. For Whatley Kallas, LLP’s previous articles on the AHP Final Rule and lawsuit click here and here, respectively.