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The Attorneys General of the States of New York and Massachusetts led the filing of a lawsuit to stop the U.S. Department of Labor (DOL) from implementing its Association Health Plan (AHP) Rule. New York Governor Andrew Cuomo and Attorney General Barbara Underwood called the AHP Rule an attempt by the Trump Administration to sabotage the Affordable Care Act (ACA) popularly known as Obamacare. In October 2017, President Donald Trump signed an executive order to promote healthcare choice and competition across the United States. He instructed the DOL to create a regulation to achieve that goal. Using its authority under the Employee Retirement and Income Security Act (ERISA), the DOL developed the final AHP Rule. On June 19, 2018, Trump announced the DOL’s AHP rule, which he called another “truly historic step in our efforts to rescue Americans from Obamacare and the Obamacare nightmare.”

Coalition of Attorneys General alleged that the AHP rule is unlawful

In the AHP rule, the DOL redefined the term “employer” in Section 3(5) of ERISA. The change allows more employers to form AHPs. In the lawsuit, the coalition of 12 Attorneys General, alleged that the DOL violated the Administrative Procedure Act when it promulgated the AHP rule. In addition, they argued that the AHP Rule violate the ACA and ERISA because it will undo critical federal consumer protections and improperly expands access to AHPs. Furthermore, the Attorneys General emphasized that the AHP rule is “arbitrary and capricious.” According to them, The “DOL failed to justify its drastic departure from nearly forty years of settled law under ERISA.” It “failed to account for the history of fraud and abuse committed by AHPs.” In a statement, Underwood said their lawsuit “seeks to safeguard the federal protections under the ACA that help guarantee access to quality, affordable healthcare.” On the other hand, Gov. Cuomo said, “We have zerop tolerance for any action that undermines the Affordable Care Act. The Trump Administration is once again waging an assault against the fundamental rights of Americans to have access to safe, high quality, affordable health care. We are suing the federal government to protect health care for New Yorkers and to fight back against these federal attacks.”