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With Alex Acosta Out, State AGs May Get Another Chance to Totally Circumvent Obamacare


It’s no secret that the Trump Administration has taken aim at Obamacare right from the word go. Now, the impending change at the Department of Labor (DOL) may lend the administration just the hand it’s been seeking.

Secretary of Labor Alex Acosta will be leaving his post at DOL on July 19; a group of Republican state attorneys general are hoping that their plan to circumvent a key Obamacare requirement will fare better under Acosta’s acting successor and longtime GOP operative, Patrick Pizzella. A coalition of states, led by Louisiana AG Jeff Landry, are asking the DOL to okay a plan to band together and create something similar to “association health plans.” Such plans allow small employers to form an association in order to drive down health insurance costs – sometimes at the expense of quality coverage.

Last February, Landry and the others requested that the DOL issue an advisory opinion declaring their plan to be legally sound under the Employee Retirement Income Security Act (ERISA).

Their letter minced no words about the Affordable Care Act:

Because the demand for affordable health coverage is so acute, many non-ACA “solutions” have already appeared in the nationwide marketplace. We put “solutions” in quotes, because we believe many of these alternatives are ill conceived, underfunded, and in some cases constitute outright consumer fraud.

Landry reportedly lobbied the White House for a quick answer on the matter, saying that, “if [Secretary Acosta] could really just focus on this for just a split second, I think that he would find this is a remarkable opportunity to give us a path forward to lowering the cost of health insurance for the middle class and small business owners.”

As for President Donald Trump, he not only supports the measure, but also thought it was already a done deal. Bloomberg Law reported that Trump was “extremely upset” that the matter hadn’t been put to rest.

Despite support from the White House, Landry’s plan faces an uphill battle. The U.S. District Court for the District of Columbia, already struck down the DOL rule on association health plans calling struck down the DOL rule on association health plans, calling the idea an “end-run” around Obamacare and said it was an unreasonable interpretation of employee benefits law.

Although the plan now advanced by Landry and others isn’t strictly an association health plan, the similarities are profound. Landry is still seeking to allow employers to band together for insurance purposes in an effort to get around Obamacare’s requirements. Patrick Pizzella is slated to begin his tenure at DOL in a few days, and we’ll see whether he gives Landry the fast-track for which the coalition of AGs is hoping.

[image via Alex Wong/Getty Images]

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Elura is a columnist and trial analyst for Law & Crime. Elura is also a former civil prosecutor for NYC's Administration for Children's Services, the CEO of Lawyer Up, and the author of How To Talk To Your Lawyer and the Legalese-to-English series. Follow Elura on Twitter @elurananos