This afternoon the Trump
Administration released a final
rule regarding Association Health Plans as well as a fact
sheet on the new rule. The rule was in response to an executive
order issued by President Trump on October 12 directing federal agencies to
expand the availability of AHPs, short-term limited duration insurance policies
and Health Reimbursement Arrangements. The proposal calls for a revision to
ERISA in order to redefine "employer" to allow more groups to qualify
as associations and treating health coverage sponsored by an employer
association as a single group health plan that would not be subject to the
ACA's essential health benefits.
The final rule does not differ much
from the proposed rule that came out in January, and the Congressional Budget
Office now estimates that 4 million Americans, including 400,000 who otherwise
would lack insurance, will join an AHP by 2023.
The goal of the rule is to provide
small-business owners, employees of small businesses and family members of
working owners/employees more coverage options, more affordable pricing,
enhanced ability to self-insure, less regulatory burden and complexity, and
reduced administrative costs.
The rule does this by eliminating
the requirement that an association exist for a bona fide purpose other than
offering health coverage. To qualify under the rule, employers would need to be
either in the same trade, industry, line of business or profession, or have a
principal place of business within a region that does not exceed the boundaries
of the same state or the same metropolitan area. Therefore, AHPs could cross
state lines if the metropolitan area includes more than one state. These plans
would be subject to state regulation of insurance and plans across multiple
states could be subject to varying rules. The Department of Labor has committed
to continuing to partner with states to protect consumers and enforce state
regulations.
Under the final rule, self-employed
individuals, sole proprietors and common-law employees would be permitted to
join an AHP. These individuals would be treated as an employee of the trade or
business for purposes of being covered by the AHP. The proposal includes
non-discrimination protections to avoid potential of adverse selection. It
would require that the association not restrict membership based on any health
factor, as defined in the HIPAA/ACA health nondiscrimination rules. These
include health status, medical condition (including both physical and mental
illnesses), claims experience, receipt of healthcare, medical history, genetic
information, evidence of insurability, and disability.
The final rule has staggered dates
for implementation:
· All associations (new or existing)
may establish a fully insured AHP on September 1, 2018.
· Existing associations that sponsored an AHP on or before the date the final rule was published may establish a self-funded AHP on January 1, 2019.
· All other associations (new or existing) may establish a self-funded AHP on April 1, 2019.
From NAHU(National Association of Health Underwriters)
· Existing associations that sponsored an AHP on or before the date the final rule was published may establish a self-funded AHP on January 1, 2019.
· All other associations (new or existing) may establish a self-funded AHP on April 1, 2019.
