On Tuesday, the Department of Labor released the final version of a rule on its governance of association health insurance plans—that is, insurance plans provided by associations of employers and small businesses (i.e., industry or trade groups).
The Trump administration has been at work on the rule since the president signed an executive order last fall directing departments to consider expanding access to association health plans.
The rule attempts to increase access to association health plans for small businesses and individuals by loosening the rules around who can form such associations. Under the rule, many association health plans would be regulated in the same manner as insurance plans provided by large employers: They would not be subject to some of the Affordable Care Act’s rules, including those governing the coverage of essential health benefits. Association health plans would not be able to charge higher premiums to sicker individuals, or to deny coverage to those with pre-existing conditions. The associations would, however, be able to vary an employer’s rates based on the demographics of workers—such as gender, age, and industry—which could result in higher premiums for employers with more workers who are old or female.
The administration argues that the rule will increase the availability of affordable coverage options for self-employed individual and small businesses. Alexander Acosta, President Donald Trump’s secretary of labor, told reporters that the rule “will offer millions of Americans more affordable coverage options.”
Opponents of association plans, however, argue they could further destabilize the ACA’s non-group and small group markets by siphoning off young, healthy individuals who don’t currently need the ACA’s protections. An analysis published by Avalere, a health-care consulting firm, in February projected that an expansion of association health plans would lead premiums in the non-group market to increase by 3.5 percent by 2022, and the number of uninsured Americans to increase by 130,000 by 2022.
