Stuart M. Gerson, Member of the Firm in the Litigation and Health Care & Life Sciences practices, in the firm’s Washington, DC, and New York offices, was quoted in the Bloomberg BNA Daily Labor Report, in “Is Labor Dept.’s Expansion of Association Health Plans Legal?” by Madison Alder.

Following is an excerpt:

The Labor Department’s proposed rule to expand association health plans could be coming soon and with it, the potential for lawsuits.

Skeptics of the proposed rule say conflict with existing federal law could subject a final regulation to litigation. That finalization may come sooner rather than later. Sen. Rand Paul (R-Ky.), a major congressional proponent of the rule, recently told Bloomberg Law that people could expect to see a final rule within the next month.

The rule would expand access to the small employer group health plans by changing the DOL’s definition of the term “employer” as it relates to federal employment law, allowing more people to access and form their own plans by geography or industry for the purpose of health insurance. The comment period for the rule ended March 6. …

Conflict With ERISA?

Association health plans can’t be expanded by a regulation because it violates the Administrative Procedures Act, Stuart M. Gerson, former Justice Department official in the George H.W. Bush and Clinton administrations and lawyer at Epstein Becker & Green PC, told Bloomberg Law. “I certainly favor more competition, and competition across state lines, but I believe that would take a statutory change to properly take effect.”

Redefining the DOL’s interpretation of the word “employer” would violate the APA “because there would be a contradiction between a regulation and a statute,” Gerson said. The statute being the Employee Retirement income Security Act.

The administration, which asked the DOL to explore the idea of expanding association health plans in an October 2017 executive order, likely would defend itself against any accusations of wrongdoing by saying it was expanding the definition of employer under ERISA “to allow sufficient flexibility,” Gerson said.

“I don’t know how you amend ERISA by a regulation,” Gerson said. “It seems to me the sort of thing the Trump administration criticized the Obama administration for trying to do with respect to other aspects of the Affordable Care Act.”

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