Department of Labor Finalizes Association Health Plan Expansion

Modesto Morganelli
Giugno 22, 2018

"This change is a big win for small businesses and employees alike".

The Congressional Budget Office last month estimated that more than 4 million people-mostly healthier, younger, and wealthier-could switch from ACA-backed health plans to cheaper AHPs in the coming months and years.

Introducing association health plans, or AHPs, has always been a goal for congressional Republicans.

Republicans have praised the new rule as providing cheaper health insurance options to those who can not afford Obamacare plans or who do not want them.

The Trump administration announced the finalized rule yesterday that would give small businesses access to insurance options like those available to large companies and let them skirt some of the health law's requirements.

SoHo-based health insurer Oscar said it will sell plans to individuals in nine states next year, expanding its exposure to the country's Affordable Care Act marketplaces as numerous country's major insurers retreat. "To the plumber in Memphis, the songwriter in Nashville, or the bakery owner in Chattanooga, who have been paying through the nose since Obamacare took effect, who might be making $60,000 dollars per year and paying $20,000 for health insurance and who is very likely not receiving a subsidy, the Trump Administration appears to have found a potential solution".

Top Republicans cheered the move as a pathway to escape soaring Obamacare premiums. "That will be called an association health plan, and in the association health plan market, not all of the rules would apply that now apply in the individual and small group market".

Those hefty coverage rules have been blamed for hiking prices of health care plans across the board, forcing customers to pay for services they don't want.

Catherine Monson can't wait to set up an association health plans that her franchisees can offer their workers.

Here in Iowa, Gov. Kim Reynolds in April signed legislation that will allow small employers to form association health plans, in an effort to provide new options for lower-cost coverage with fewer mandates. "AHPs are about more choice, more access, and more coverage", he claimed. "For everyone else, costs rise when you split up the risk pool".

During a comment period after the proposal came out in January, Labor received hundreds of comments, the vast majority opposed to the new rules.

Newly expanded Department of Labor (DOL) guidelines will now make it possible for small businesses to offer compelling, competitively priced employer-sponsored group benefits plans beginning September 1, 2018.

The final rule also clarifies that the association must have at least one substantial business objective unrelated to providing health coverage. "When the people who are tricked into buying these cheap, junk plans need their health insurance to cover their medical care, they'll realize they've been swindled out of their money with no comprehensive health coverage to show for it". Among other things, the order called for loosening AHP commonality rules as one way to expand alternatives to the Affordable Care Act (ACA) exchanges and enhance competition in the market for health coverage. On the other hand, the analysis showed, the rules would drive up premiums in the individual marketplaces by 3.5 percent, prompting 130,000 more people to become uninsured within five years.

Today, the Trump Administration released its final regulation on Association Health Plans expanding eligibility for these bare-boned plans, which do not have to provide the same level of minimum coverage as individual policies sold under the Affordable Care Act.

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