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Association Health Plan Update

By Eric Elgin

July 24, 2019

width=400Back in the May/June 2018 issue of BoxScore, we introduced you to Association Health Plans (AHPs) and AICC’s efforts to make an AHP available to its U.S.-based members. What’s an AHP? To refresh, in early 2018, President Donald Trump, through an executive order, tasked the Department of Labor (DoL) with modifying existing rules in order to make it easier for small employers to offer their employees better health coverage at lower rates and to avoid some of the regulatory burdens that the Affordable Care Act (ACA) puts on small employers. The new rules took effect in September 2018.

So, where’s the AHP program offered by AICC to its members? Shortly after the new DoL rules took effect, 11 states and the District of Columbia sued the federal government, alleging that the new rules “sabotage our health care system and gut consumer protections. …” On March 28, 2019, Senior Judge John D. Bates of the Federal Court for the District of Columbia found for the plaintiffs. The rule, stated the judge, “is clearly an end run around the ACA.”

The DoL is expected to appeal the ruling.

We have opined in these pages that changing rules by executive order is never preferable to legislation. Bills were recently introduced in both the House and the Senate that would ensure that small businesses and self-employed individuals will still have access to AHPs. Sens. Mike Enzi (R-Wyo.) and Lamar Alexander (R-Tenn.) introduced a bill shortly after the judge’s action in the D.C. court. The Enzi-Alexander bill would codify the AHP rules as they went into effect in September, allowing access to the same lower-cost health insurance with the same patient protections as those plans offered by larger employers. A companion bill was introduced in the House by Rep. Tim Walberg (R-Mich.).

“Association Health Plans work for small businesses,” Enzi said in April. “They provide coverage to people who would not otherwise have it, and they provide comprehensive health benefits at an affordable price the same way larger employers do—the same way most folks get insurance. One family shoe store probably cannot get an insurance company to play ball, but 1,000 family shoe stores probably could.”

Both bills have been endorsed by the Coalition to Protect and Promote Association Health Plans, which pointed out that AHPs formed under the DoL rule are subject to the same coverage requirements that apply to ACA-compliant plans, contrary to some claims made by opponents of AHPs. The coalition includes the American Society of Association Executives, of which AICC is a member, and nearly two dozen other national and state-level associations.

“Importantly, all AHPs are voluntarily covering all or virtually all of the ACA’s ‘essential health benefits,’” the coalition said in a statement in April. “The bottom line is that AHPs are not an ‘end run’ around any federal or state law, despite recent assertions.”

AICC will continue to monitor developments and advocate for its membership. Preliminary work has been done with a large insurer to be prepared once legislation passes or the appeals process is complete. Should you have the opportunity to speak with your House member and/or your U.S. senators, please inform them of your support for this legislation.


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Eric Elgin is owner of Oklahoma Interpak and Chair of AICC’s Government Affairs Subcommittee. He can be reached at 918-687-1681 or eric@okinterpak.com.