A federal appellate court has paused a state regulation promulgated by the New York State Department of Financial Services that allows the agency to collect funds from health insurance companies and redistribute the money to insurers who may be negatively impacted by a federal risk adjustment program.

The U.S. Court of Appeals for the Second Circuit granted a motion for a preliminary injunction from UnitedHealthcare this week while the insurer appeals a decision from U.S. District Judge John Koeltl of the Southern District of New York that dismissed its lawsuit against the state in August.