Starting September 1, 2018, the Department of Labor (DOL) has issued a final rule that expands consumer availability of association health plans (AHPs). This rule levels the playing field for small businesses looking to band together and buy health insurance without regulatory limits that individual states and the Affordable Care Act (ACA) impose on smaller employers. Operating as an independent market, AHPs will be able to scale plans and provide more affordable benefits. Secretary of Labor Alexander Acosta believes it will help families and employee groups to have more choice, more access, and more coverage. According to Acosta, the final rule will also implement safeguards to enforce anti-discrimination protections for enrollees.
Under the rule, there are requirements for employers looking to form an AHP:
- Only a “bona fide group or association” can create an AHP—this excludes providers and related healthcare professionals. But it allows payers and related organizations to consult others by preparing claim administration, formulary guidance, and provider network design.
- AHPs need a “commonality of interest” among individuals looking to form a group. For example, a commonality includes individuals who have similar geographical locations and professions. Members can fall in the same trade, industry, or profession through the U.S. or in the same place of business within the same state or common metropolitan state.
- Employers who participate in a benefit program (directly or indirectly) exercise control over the program, both in form and substance.
The DOL expects a substantial number of uninsured people will enroll in AHPs for its affordability. The U.S. Congressional Budget Office (CBO) predicts that 400,000 people will enroll and 3.6 million people will switch coverages.