Plan to re-establish AVMA Life medical insurance stalled

Federal judge blocks association health plan expansion

April 1, 2019 (published)
By Jennifer Fiala

The American Veterinary Medical Association has tabled plans to revive its defunct group health-insurance program following a court decision Thursday to uphold key restrictions in the federal Patient Protection and Affordable Care Act, also known as Obamacare.

"We are disappointed, obviously, but we knew this was a possibility, and we know that this isn't the final word," AVMA President Dr. John de Jong said in a news release issued today.

In the 43-page ruling, Judge John D. Bates at the U.S. District Court for the District of Columbia found the Department of Labor's final rule governing association health plans to be unlawful. The agency created the final rule in response to an executive order issued in October 2017 by President Donald Trump, who sought to ease restrictions in the ACA, which passed in 2010 under the Obama administration. 

The court's ruling invalidates regulatory provisions promulgated by the Labor Department that expand access to AHPs and allow employers to provide health coverage with fewer benefits than mandated under Obamacare.

The legal challenge was brought by nearly a dozen state attorneys general who argued that Trump's order conflicts with key tenets of the ACA, which barred AHPs from limiting coverage to select groups of people. Concerns also have been raised that AHPs could weaken Obamacare, siphoning healthier people away from ACA markets by offering lower premiums.  

AVMA Life, which sells a variety of insurance products through the AVMA, offered association-sponsored medical insurance to members for nearly 60 years. The organization, then known as the Group Health and Life Insurance Trust (GHLIT), was forced in 2013 to stop offering medical insurance when its carrier, New York Life Insurance Company, and others in the business exited the medical insurance market.

Some 17,500 veterinarians and their families lost medical coverage when GHLIT's program ended on Dec. 31, 2013.

When Trump attempted to ease federal restrictions in 2017, AVMA Life embarked on plans to re-enter the medical insurance arena. It envisioned offering coverage to AVMA members and their families as before, and to extend access to coverage to employees of AVMA members.

In January, AVMA officials announced that the insurance rollout would begin July 1 in a handful of states. According to today's news release, they're still optimistic.

"Veterinarians across the country were very pleased that the AVMA was poised to again sponsor health plans, and we're not giving up on that effort," de Jong said in the news release. "We are evaluating all of our options, and we will continue to advocate for the interests of veterinarians, including access to high-quality, affordable health plans through our association."

The Trump administration said it disagrees with the ruling but has not announced an appeal. Justice Department spokesperson Kelly Laco said in a statement that the administration is "considering all available options." 

Update: AVMA-sponsored health insurance resumed July 1. Eligible employers can enroll in nine states: Arizona, Georgia, Illinois, Indiana, Montana, Nebraska, Oklahoma, Texas and West Virginia. The coverage extends to employers, their employees and dependents. 

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