Association Health Plans Get New Look

Rules issued by the Trump administration would make it easier for small employers to shift into the large employer market

Small employers can more effectively ban together to buy health insurance under rules unveiled yesterday by the Trump administration that loosens restrictions on association health plans (AHPs). That means that small companies can now buy insurance in the same market as larger companies.

“This reform allows small employers—many of whom are facing much higher premiums and fewer coverage options as a result of Obamacare—a greater ability to join together and gain many of the regulatory advantages enjoyed by large employers,” according to a press release by the Department of Labor, which changed the rules.

That will make insurance effectively cheaper for such companies, reports Kaiser Health News, but critics warn that the resultant benefits amount to “junk insurance.” For instance, such plans are exempted from covering the ACA’s 10 essential health benefits such as mental health care.

Just how the new rules will affect ACA plans has been commented on from many quarters including AHIP, which warned that they could lead to higher premiums and fewer insured in that market. AHIP did see some positives because the “rule provides some important protections by ensuring consumers, including those with pre-existing conditions, do not face discrimination as new association plans are created, and by preserving state authority to regulate AHPs offered in their markets.”

An opinion piece in today’s Wall Street Journal by Scot W. Atlas, MD, author of Restoring Quality Health Care: A Six Point Plan for Comprehensive Reform at Lower Cost, the move represents the continual weakening of the ACA. “The individual mandate is nullified,” Atlas writes. “The administration has permitted more low-cost ‘limited duration’ insurance plans, and more small businesses now have access to association health plans. The next step should be to expand and improve health savings accounts.”

Still, a lot rides on implementation. As the Associated Press reported yesterday: “Ultimately, the idea’s success depends on buy-in from plan sponsors, consumers, insurers and state regulators. No major consequences are expected for people covered by large employers.”