Federal court rules against association health plans

Cordova Chamber cancels luncheon in wake of decision

A banner for the Cordova Chamber of Commerce displayed outside the Cordova Center. (Photo by Cathy Renfeldt/for The Cordova Times)

After a recent federal court decision, the Alaska Chamber has been forced to pause its efforts to offer comprehensive health coverage at a reasonable cost to their members.

In response to the ruling, the Cordova Chamber of Commerce has cancelled their April 23 Chamber Luncheon.

The March 28 ruling by the U.S. District Court for the District of Columbia invalidated a portion of the Department of Labor’s final rule expanding the range of AHPs. In the 43-page ruling, Senior District Judge John D. Bates held that two provisions of the DOL’s final rule governing association health plans were unlawful. The agency created the final rule in response to an executive order issued in October 2017 by President Donald Trump.

The Trump administration promoted the new plan, which did not have to meet all requirements of the Affordable Care Act, as a move to provide people with cheaper insurance options. Opponents of the plan, including 11 states and the District of Columbia, filed the lawsuit, alleging that the final rule interpreting the definition of “employer” in the Employee Retirement Income security act of 1974 is unlawful. ERISA governs employee benefit plans that arise from employment relationships.

“The Final Rule is clearly an end-run around the ACA (Affordable Care Act),” Bates wrote. “Indeed, as the President directed, and the Secretary of Labor confirmed, the final rule was designed to expand access to AHPs in order to avoid the most stringent requirements of the ACA,” the judge said.

Read the entire Bates decision online at https://affordablecareactlitigation.files.wordpress.com/2019/03/5940153-0-12659.pdf

“Like many Cordova business owners that I spoke to, we at the Cordova Chamber were really excited about this health insurance option and are hoping this court ruling is not the end of the story for it,” said Cathy Renfeldt, executive director of the Cordova Chamber of Commerce.

Renfeldt apologized for any inconvenience this may have caused and thanked everyone for their understanding.

“Even though this national court ruling pauses our efforts, we are still looking at every option to bring an association health plan to life in Alaska to help small business owners and employees,” said Albert Fogle, vice president of the Alaska Chamber.