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AICC Update on Association Health Plans

By AICC Staff

December 5, 2018

Earlier this year, AICC embarked on investigative endeavors related to the U.S. Department of Labor’s (DoL) introduction of new rules on Association Health Plans (AHPs). The Trump administration issued an executive order in January creating preliminary new rules for AHPs, kicking off initial and final commentary periods as required by law. On June 19, the DoL issued a final rule implementing the AHP executive order.

AICC, based on action taken by the board of directors, engaged its insurance provider to advise us on how we can make this a member benefit to lower health insurance costs for member companies that have fewer than 75 employees. This is the most attractive feature of belonging to an AHP—allowing small companies to be rated by insurance carriers as large companies. This designation removes some restrictions put in place by the Affordable Care Act (ACA), resulting in cost reductions. AICC surveyed membership in the second quarter of 2018, and 85 percent of respondents expressed interest in AICC providing an AHP to its members.

It’s time for an AHP update. Simply said, not much has happened. While many associations such as AICC are ready to be willing participants, insurance companies have not really stepped up to embrace the new rules. This is not because they don’t want to, but rather because the path to do so is not clear. The main reason is because the ruling, as written, does not supersede states’ ability to regulate insurance within their borders. This makes it difficult to launch an AHP on a nationwide basis. The DoL stresses that the rule “does not modify or otherwise limit existing state authority” to regulate AHPs.

On top of that, another limitation to pursuing an AHP launch at this time is that a lawsuit has been filed by Democratic attorneys general in 11 states and the District of Columbia. The suit alleges that the DoL rule was an “unlawful run around” the consumer protections offered in the ACA.

AICC in both 2017 and 2018, as one of the brought at the annual Print & Packaging Summit in Washington, D.C., urged Congressional action in favor of AHPs. AICC’s position is that legislation of a matter important to membership is always preferred over executive action. Back in March 2017, the House of Representatives passed H.R. 1101, the Small Business Health Fairness Act of 2017, by a vote of 236 for, 175 against, and 18 other. The bill “allows small businesses to join together in association health plans across state lines through ‘bona fide’ associations to become larger purchasers of health insurance. Specifically, the bill relieves small businesses that form AHPs from costly state-mandated benefit laws that often make coverage prohibitively expensive.” The measure passed over to the Senate, where it remains in committee.

AICC will continue to monitor events regarding AHPs and keep you, the members, informed as the process unfolds. We understand that health care and health insurance costs continue to rise, and we want to provide a platform to give membership an opportunity for relief.