Eleven states, accompanied by the District of Columbia, have launched a lawsuit against the federal government. This suit is led by New York and the following states have signed on, as well: California, Delaware, Kentucky, Maryland, Massachusetts, New Jersey, Oregon, Pennsylvania, Virginia, and Washington. This group hopes the suit will push the Department of Labor to roll back a recent regulation to expand access to associated health plans (AHPs). These AHPs are generally cheaper but offer fewer benefits.

The regulation in question expands who can gain access to an association health plan. In practice, this would enable small businesses to join together when getting insurance. In a previous post here on the Boon Blog, we discussed the regulation and its potential impact in greater detail. You can check it out here.

In the lawsuit, states charge that this regulation is intended to move a large number of individuals and small employers into the large group market to avoid the core protections of the Affordable Care Act. The individual market allows people to obtain health insurance, if they are unable to access it through the government or their job. The small group market is used by small businesses to insure employees.

The Affordable Care Act’s essential health benefit requirements do not apply in the large group market. Further, the states participating in the suit allege that the final rule is unlawful because it operates in direct conflict with the statutory structure adopted by Congress in the ACA, to apply basic protections to individuals and small groups. The states claim that this will do harm as it will require them to devote additional resources to managing a high volume of fraudulent or inadequate plans offered by associations.

This is a rapidly developing issue, so keep up with the Boon Blog for the latest developments. You can also catch up on all things Boon on our Facebook, Twitter, and LinkedIn.