Does the Recent STLDI Ruling Have Any Relevance for the Association Health Plan Appeal?


On July 19, the U.S. District Court of Washington D.C. ruled against the plaintiffs that sought to undue recent regulation on short-term limited duration health insurance (STLDI) plans. STLDI plans are completely different than association health plans and operate under largely different regulations. However, the rationale by which the plaintiffs sought to block the new regulation on STLDI was reminiscent of the legal arguments used to block recent July 2018 regulation on association health plans. In his decision against the plaintiffs, Judge Richard J. Leon spent considerable time considering the conditions of legitimate rulemaking (i.e. regulation) by government agencies.

“At its core, plaintiffs’ merits challenge is based on their view that in promulgating the 2018 Rule, the Departments exceeded the limits that Congress imposed on the agencies when it enacted the ACA…Accordingly, for plaintiffs to succeed on their claim that the Departments have overstepped the bounds of their delegated authority, there must be something so “extraordinary” about the particular regulatory power exercised in the 2018 Rule…that Congress would not have conferred such power without so stating.”

Judge Leon’s detailed analysis and subsequent determination that government agencies acted within their regulatory authority will likely figure within the appeal of the decision vacating the 2018 Rule on association health plans. In both the STLDI decision and the ongoing association health plan appeal, the satisfaction of the Chevron two-step framework for agency rulemaking is central. The Chevron two-step framework is the method of judicial review of agency permissable rulemaking on the part of the agency. When the Chevron two-step framework is applied, a regulation will normally survive legal challenge if it:

  1. Addresses an issue on which a statute is ambiguous or silent
  2. Represents a reasonable interpretation and is “rationally related to the goals of the statute.”

Inasmuch as the current administration enacted the association health plan regulation update with the same procedural approach and rulemaking philosophy as had been used for their STLDI changes, proponents of association health plans have reasons for optimism with respect to the outcome of the government’s appeal of the D.C. court decision in March that struck down the updated rules for association health plans. Much of what is said the Judge Leon’s decision could be recycled toward the government’s appeal of the lower court decision.

While a detailed summary of how the STLDI regulation satisfied the Chevron framework is beyond the scope of this post, you can read the full decision at