11 state, DC AGs sue Trump administration over association health plan rule

Democratic attorneys general from 11 states and the District of Columbia filed a lawsuit against the Trump administration over its final association health plan rule.

The AGs filed their 56-page lawsuit in the U.S. States District Court for the District of Columbia July 26. The lawsuit claims the final association health plan rule "upends a decades-old understanding of a foundational employee benefits law for the purpose of exempting a significant portion of the health insurance market from the ACA's consumer protections."

The AGs also claim permitting some plans that do not comply with certain ACA protections to sell health plans puts states at a greater risk for fraud. This will require states to redirect "significant" resources to ensure consumers are protected, according to the lawsuit.

The final association health plan rule, issued June 19, gives more leeway to small businesses looking to create health insurance plans that bypass many ACA regulations, but lower member expenses, according to The New York Times. The rule is in response to an executive order signed by President Trump Oct. 12.

The association health plans allow groups such as community organizations, churches and professional associations to band together to purchase or offer health insurance. However, offering coverage for "essential health benefits" like emergency services, maternity and newborn care, mental health, and prescription drugs is not a requirement.

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