A Trump administration rule seeking to expand the use of association health plans was struck down Thursday by a federal judge, who called the rule an unlawful "end run" around insurance coverage requirements mandated in the Affordable Care Act.

In his ruling, U.S. District Judge John Bates sided with Democratic attorneys general in 11 states and the District of Columbia who had sued the federal government for what they viewed as an unconstitutional attempt by President Donald Trump to gut the ACA after a Republican-controlled Congress failed to repeal the health care law. The Department of Labor enacted the rule last year after the president signed an executive order directing the agency to expand the use of AHPs as a way to circumvent ACA coverage requirements.

"The Final Rule is clearly an end-run around the ACA," Bates said in his ruling. "Indeed, as the President directed, and the Secretary of Labor confirmed, the Final Rule was designed to expand access to AHPs in order to avoid the most stringent requirements of the ACA."

One group to express disappointment with the court's ruling was the National Association of Realtors, which said the rule would have offered low-cost coverage alternatives to its 1.3 million members in many states.

"NAR is reviewing this ruling to determine its potential nationwide impact and we vow to continue to fight for more affordable, quality health insurance options for our members," NAR said in a statement.

Many associations have long sought to expand the availability of AHPs to give small businesses the ability to offer health coverage to employees at affordable prices. Critics, on the other hand, contend previous AHPs have been rife with fraud and mismanagement.

The Labor Department rule exempted AHPs from covering the ACA's 10 essential health benefits, which include medical services such as hospitalization and mental health. Large-group plans covering businesses with more than 50 employees were already exempt, although most provide the benefits anyway. The rule treated AHPs with more than 50 individual members as a large group for the purposes of law.

The rule left in place ACA provisions such as protections for individuals with pre-existing conditions. It also left oversight of health plans to individual states, reportedly causing some national groups—in particular the National Federation of Independent Business—to abandon efforts to offer multi-state plans. Still, several state groups have pushed forward with their own statewide AHPs, and some national associations are still exploring the option.

The Trump administration did not immediately say whether it intended to appeal the ruling.

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