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Trump administration proposes rule to advance association health plans

The proposed rule would enable employers to establish association health plans designed to increase competition and reduce premium costs.

Susan Morse, Senior Editor

The Trump Administration is proposing to allow employers to band together to form association health plans for insurance coverage.

The proposed rule issued Thursday by the Department of Labor is seen as another move to weaken the Affordable Care Act insurance marketplace as it encourages cheaper coverage options that don't comply with ACA rules.

[Also: Trump administration ends cost-sharing reduction payments under ACA]

It follows up on President Donald Trump's October executive order aimed at increasing competition and lowering premiums through facilitating the purchase of insurance across state lines and in provisions that represent ACA go-arounds.

These included the formation of association health plans, short-term, limited duration insurance and health reimbursement arrangements.

[Also: Medical, consumer advocacy groups against Trump executive order]

Large employers often are able to obtain better terms on health insurance for their employees than small employers because of their larger pools of insurable individuals across which they can spread risk and administrative costs, according to the executive order.

But opponents have said the rules could lead to poorly regulated health plans that offer limited coverage. Association health plans aren't subject to the consumer protections of plans sold under the ACA.

Ranking Democrats expressed concern Thursday. 

"Today, the Trump Administration took further steps to undermine the health and well-being of the American people. The Department of Labor proposed a new rule threatening health coverage for workers and owners of small businesses by allowing the sale of plans with no guarantee of comprehensive coverage for pre-existing conditions. This proposed rule comes less than a month after congressional Republicans passed a tax bill that paid for tax cuts for billionaires and corporations by cutting health care for millions of middle-class Americans. According to the Congressional Budget Office, the GOP tax bill will increase premiums by 10 percent and leave 13 million Americans without health insurance over the next 10 years," said Ways and Means Committee Ranking Member Richard Neal, Education and the Workforce Committee Ranking Member Bobby Scott and Energy and Commerce Committee Ranking Member Frank Pallone, Jr.

Last month, America's Health Insurance Plans and other organizations voiced concern with the changes in the executive order.

"Expanding and extending short-term, limited-duration health plans, increasing enrollment in Association Health Plans (AHPs), and relaxing rules for employer Health Reimbursement Arrangements (HRAs) all increase adverse selection in insurance markets that serve millions of individuals and employers," said the Dec. 14 letter the groups sent to the State Departments of Insurance. "We are concerned that this could create or expand alternative, parallel markets for health coverage, which would lead to higher premiums for consumers, particularly those with pre-existing conditions."

The rule would change existing regulations under the Employee Retirement Income Security Act to let more groups qualify as associations that could purchase coverage outside the ACA market, according to the rule proposed this week.

Twitter: @SusanJMorse
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