President Trump has issued an Executive Order (EO) that could impact you, your employees as well as your patients if ultimately adopted. The goal of the EO is to promote health care choices and competition across the United States.
The Order directs relevant federal agencies to develop and put out for public comment new regulations regarding the establishment of so-called “Association Health Plans” (AHPs).
Association Health Plans
Under the Employee Retirement Income Security Act (ERISA), large multi-state employers and labor unions have had the ability to circumvent individual state health insurance laws to form company- or union-wide health insurance groups, regardless of where the employee or union member lived.
Many GOP lawmakers have long-championed the ability of organizations, such as the American College of Allergy, Asthma and Immunology, to have the ability to form an ERISA-like group.
On Oct. 12, President Trump directed the Secretary of Labor (the Department of Labor oversees and enforces ERISA), to propose new regulations that would allow small businesses or national associations whose members are independent businesses, to have the same authority currently only available to large employers and labor unions.
In a statement accompanying the announcement, the Trump Administration said:
“Large employers often are able to obtain better terms on health insurance for their employees than small employers because of their larger pools of insurable individuals across which they can spread risk and administrative costs. Expanding access to AHPs can help small businesses overcome this competitive disadvantage by allowing them to group together to self-insure or purchase large group health insurance. Expanding access to AHPs will also allow more small businesses to avoid many of the PPACA's (Patient Protection and Affordable Care Act) costly requirements.”
As noted in the above statement, many small businesses are unable to take advantage of the administrative and group purchasing savings available to large companies and organizations covered by ERISA. This is particularly true of national organizations whose members reside in multiple states.
As with most things coming out of Washington these days, the “devil will be in the details” but it appears that some additional options for how and where to purchase health insurance for association members and their employees may be on the horizon.