New Proposed Rule Opens Path to Association Health Insurance Plans

Last fall, the Trump Administration proposed several changes to the Affordable Care Act (ACA), which was signed into law in 2010.  One of the proposed rules involves making it easier for trade groups, small businesses and associations to band together and purchase the type of health insurance coverage that large companies offer their employees. The goal is to create more insurance competition and drive down premiums.

According to the proposal, people who presently obtain insurance through a small business policy or purchase it on their own could sign up for an association plan. The Labor Department estimates that 44 million people would be eligible for this type of program, which includes small businesses and self-employed sole proprietors, and people who do not obtain insurance but could if their employer found a less expensive option.

Under the proposed rule, association plans for workers in a shared industry could be implemented and marketed across state lines. In many cases, associations could also customize their benefits packages. These plans would function similar to large group plans and self-insured plans, which are subject to fewer federal and state requirements than individual or small group insurance. They are, for example, not required to provide “essential health benefits,” including hospitalization, prescription drugs and emergency care.

Many ACA rules, however, would still apply to association plans. Plans could not reject employers based on the health status of their workers, and individual employees in a workplace could not be charged different amounts based on their health.

Trade groups and small business associations have applauded the proposed ruling, saying that the newfound leeway would expand their purchasing power, increasing health care choices for small employers and franchise operators. The International Franchise Association, for example, said that it will look into the possibility of offering coverage to its members. “I think that this just provides more flexible tools and options for employers to offer their employees,” said Suzanne Beall, the group’s vice president for government relations and public policy. “More tools and options is always a good thing.”

The proposal now faces a 60-day comment period. Meanwhile, the impact and any ramifications of the proposed changes on the insurance markets will ultimately depend on how much interest there proves to be for association plans under the looser rules. Manchester Specialty Programs will continue to keep abreast of this issue, particularly as to how it could impact the home health care and hospice sector. We specialize in insuring the home care industry and provide comprehensive portfolio of coverages that includes General Liability, Professional Liability, Workers’ Compensation, Management Liability, Cyber Liability and Non-Owned & Hired Auto insurance. For more information about our business and insurance lines, you or your local agent/broker may contact us at 855.972.9399.

Sources: NY Times, Kaiser Health News