President Trump's Proposed Rule May Help Expand Association Health Plans

Date: February 23, 2018

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President Donald Trump has proposed a new rule that would make it easier for small businesses to jointly buy health insurance through association health plans (AHPs).

The executive order would allow AHPs to band together small business owners, their employees, sole-proprietors, and other self-employed people as a single group to buy insurance, according to the New York Times.

AHPs would operate with some exceptions to the Affordable Care Act’s regulations on individual and small business plans. For example, AHPs would not be subject to community rating and “essential health benefits” regulations. The AHPs could be potentially sponsored by trade and professional groups across state lines.

AHPs are currently limited due to strict federal and state regulations. But Trump’s new proposal could change that. Comments on the proposed regulation are due on March 5, 2018You can make your comments here. These comments will be analyzed, and a final regulation will be issued in the coming months.

“The proposed regulation offers some promise, but also has certain limitations,” said NFIB Senior Director of Government Relations Kevin Kuhlman. “On the plus side, the proposed regulations reviews and streamlines conflicting guidance and case law that limit association health plans. On the negative side, using the regulatory process limits the expansion as the proposal must comply with certain existing state and federal laws on insurance. A regulation can also be overturned by a future administration.”

NFIB has submitted comments with specific changes to the proposed regulation to further expand the functionality of AHPs, including expanding the “commonality of interest” definition to include business size. This suggestion would allow small businesses, regardless of industry, to join together and form a national AHP. We must wait until the final regulation is released to see whether this suggestion will be incorporated.

The Labor Department has advocated for the rule’s small business benefits that could offer some relief from state insurance rules that restrict “product offerings and pricing.” About 11 million people could be eligible for the proposed rule.

“The cost of healthcare has been the number-one problem for small businesses for more than 30 years,” said Juanita Duggan, NFIB president and CEO. “NFIB has fought to remove penalties on small businesses for helping their workers buy health insurance, and the President’s action advances that effort.”

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