The Department of Labor issued a final rule this week that expands association health plans to help small businesses and self-employed people get affordable health coverage. ASAE is currently analyzing the rule to determine its viability for associations.
The Trump administration this week issued a final rule [PDF] expanding association health plans (AHPs) as a means of helping small businesses and self-employed people get affordable health coverage.
“The Trump administration hopes to level the playing field between large companies and small businesses by expanding access to association health plans,” Labor Secretary Alexander Acosta told reporters on Tuesday. “This expansion will offer millions of Americans more affordable coverage options.”
Acosta said government forecasts estimate the rules will allow as many as 4 million people to gain coverage through AHPs, including 400,000 who are currently uninsured.
The final rule broadens the definition of an employer under the Employee Retirement Income Security Act to allow more groups to form AHPs as an alternative to the Affordable Care Act (ACA) health exchanges. ERISA is the federal law governing health benefits offered by large employers. Under the final rule, AHPs may be sold nationally, in groups of states or in a single state, according to the Labor Department. States will continue to regulate them, although ASAE and others had pushed for AHPs to be exempt from state regulation.
ASAE also suggested in its comments [PDF] submitted to the Labor Department in February that the definition of “bona fide groups or associations” be expanded to include professional societies whose members are not necessarily employers. The final rule, however, clarifies that existing law stipulates that an AHP must be sponsored by a group of employers and/or self-employed individuals who themselves are considered employers. An existing trade association would be eligible to form an AHP, for example.
In addition, the new rule allows small businesses and self-employed individuals who are in unrelated professions, but in the same geographic region, to band together to obtain coverage through an AHP.
The rule also attempts to strengthen oversight of AHPs by requiring associations to have a formal organizational structure with a governing body and bylaws so they can act in the interests of participating employers and ensure claims are paid.
However, the rule has already been challenged by attorneys general in New York and Massachusetts, who filed suit to block the administration from offering plans that don’t cover all of the ACA’s essential health benefits.
“We will sue to safeguard the protections under the Affordable Care Act and ensure that all families and small businesses have access to quality, affordable health care,” the attorneys general said in a statement Wednesday.
ASAE is currently analyzing the final rule to determine its viability for associations that are interested in forming an AHP. ASAE also will be discussing it with a wide range of eligible associations to address any policy concerns not clearly resolved in the final rule.