The executive order from Donald Trump aimed at letting small businesses join nationwide associations for the purpose of buying large-group health plans not subject to coverage requirements of the Affordable Care Act could be in for a legal battle.
According to a CNBC report, health care and employment law experts warn that if the EO proceeds, states could argue that the federal government overstepped its authority in violation of the Employee Retirement Income Security Act, which governs large-group plans.
Reuters reports that legal experts say states might argue that associations formed for the purpose of buying insurance are not employers under ERISA. According to Allison Hoffman, a professor at the University of Pennsylvania School of Law, although the ERISA allows associations to qualify as employers and manage large-group plans, federal regulators have usually required that members of such associations have a high degree of common interest beyond just buying insurance.
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