California joins 12-state coalition opposing U.S. Labor Department over AHP changes

By Marian Johns | Aug 2, 2018

SACRAMENTO — California has become the latest state to join a 12-state coalition filing a lawsuit against the U.S. Department of Labor for a new regulation that allows employers to group together as Associated Health Plans (AHPs).

The new regulation, based on an executive order signed by President Trump in October, calls for the expansion in AHPs allowing small employers nationwide to group together for health plans. 

“This unlawful, irresponsible rule allows employers to offer their workers bare bones health coverage," California Attorney General Xavier Becerra said in a statement. "It would destabilize our insurance markets and put the health of working families nationwide at risk."

The coalition also argues that the move will allow the offering of "junk health plans" and open the door to allow insurers to discriminate based on health status, age or gender. 

According to the lawsuit, filed in U.S. District Court for the District of Columbia, the Department of Labor is unlawfully conflicting with the Affordable Care Act and breaking decades of precedent. Among the conflicts is the allowing of a self-employed individual with no employees to be both"employer" and "employee" under the new Employment Retirement Income Security Act (ERISA), according to the California Attorney General's Office.  

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