AG Derek Schmidt: Expanding association health plan options is lawful

A change in federal regulations that allows more options in the health-care marketplace is lawful, according to a brief filed by 14 state attorneys general, including Kansas Attorney General Derek Schmidt. The Governor of Mississippi and the Governor of Kentucky joined in the brief.

“The issue here is the limits that federal law and regulations place on the ability of states to authorize what are called association health plans,” said Schmidt. “Association health plans, the basic concept is, a group of similarly situated small businesses or other similar-type entities can group together as if they were a single large entity and by pooling themselves together that way, they can compete in the marketplace to get better deals in terms of the cost of providing health care to themselves or to their employees.”

The key here is a change in the way the Trump administration is handling such plans from how the Obama administration did.

“The old rules say that if you are a self-employed individual who also has employees in your self-employed business, you are eligible to participate in an association health plan, you may be,” said Schmidt. “If you are a self-employed individual who has no other employees, so truly the smallest of small businesses, you and your family are not eligible.”

Several states, led by New York, challenged the relaxed regulation in federal district court. Schmidt and his group of colleagues agree with the Trump administration.

“At the end of the day, more flexibility is better for states and in this case, is better for consumers and small businesses, self-employed individuals,” said Schmidt. “We’re fighting to make sure those options can be available. That’s what this all boils down to.”

The attorneys general argue courts have consistently held as long as a federal agency’s change of position from one presidential administration to the next wasn’t arbitrary and capricious, the reversal is a valid exercise of executive authority.