Benefits & Executive Compensation News

Shutdown No Reason to Halt DOL Health Rule Suit, States Say

Dec. 28, 2018, 3:46 PM

States challenging the Labor Department’s new rule on association health plans said their lawsuit should continue during the federal government shutdown.

The DOL Dec. 26 asked a federal judge to pause the lawsuit until the Justice Department attorneys defending the rule are able to return to work. But the Jan. 1, 2019, effective date for portions of the rule is fast approaching and the rule’s harms will be amplified if the case doesn’t move forward as scheduled, the states shot back Dec. 27.

The Justice Department’s 2019 contingency plan allows its attorneys to work during a shutdown when there’s “some reasonable likelihood” that the “protection of property” would otherwise be compromised, the states argued. This lawsuit meets that standard, because the states will suffer financial harm if their insurance markets are disrupted by the DOL rule, the states said.

The DOL disagreed in its own Dec. 27 filing.

The DOL rule at issue changed the definition of “employer” to allow more small employers, including self-employed individuals and independent contractors, to band together to create large group health plans for workers. Supporters say the rule expands access to health insurance coverage; opponents say it guts the patient protections guaranteed by the Affordable Care Act.

Eleven states plus the District of Columbia are leading the effort to overturn the rule in court. The American Medical Association and nine Democratic lawmakers led by Nancy Pelosi (D-Calif.) have filed briefs opposing the rule.

Business groups, including the U.S. Chamber of Commerce, the Restaurant Law Center, and a new coalition dedicated to backing association health plans, supported the rule in court, as did the attorneys general for Texas, Nebraska, Georgia, and Louisiana.

If the case isn’t paused, the DOL will be required to submit a joint appendix highlighting the documents relevant to the litigation by Jan. 2.

The case is pending before Judge John D. Bates of the U.S. District Court for the District of Columbia.

The case is State of N.Y. v. U.S. Dep’t of Labor, D.D.C., No. 1:18-cv-01747-JDB, opposition to motion to stay 12/27/18.

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; C. Reilly Larson at rlarson@bloomberglaw.com

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