- The Department of Labor's proposed rule to allow more small businesses and others to join together to offer association health plans (AHPs) was panned by the insurance and hospital lobbies and other stakeholders in comments due this week.
- America’s Health Insurance Plans (AHIP) argues the proposal could increase the risk of fraud and insolvency for consumers. It adds that “creating a different set of rules for different market actors will disturb insurance markets in a way that runs counter to DOL’s stated objectives.” The American Hospital Association (AHA) worried about the impact on the small and individual markets.
- The proposed rule would allow certain companies to offer plans that sidestep Affordable Care Act regulations requiring essential health benefits be covered. It would also expand the definition of employer under the Employee Retirement Income Security Act of 1974 (ERISA).
Although some business groups, including the National Retail Federation, praised the proposal when first released as a step toward expanding access to more affordable health insurance, other groups like AHIP, AARP and PhRMA raised concerns in their comments about the lack of consumer protections under AHPs.
AHIP argued that any final rule should protect the role of state governments in regulating insurance, maintain a statutory definition of employer to not include working owners who lack employees and establish guardrails such as non-discrimination protections for consumers.
Further, AHIP argues the DOL does not have the legal authority to expand the definition of employer under ERISA.
“Including such working owners in the definition of ‘employer’ (for AHP purposes only) countermands the statute, departs from binding regulations, is an abrupt change from longstanding interpretations that have engendered serious reliance interests, and creates troubling inconsistencies between ERISA and other federal statutes governing group health plans,” AHIP wrote.
The American Hospital Association also urged DOL to not finalize the proposed rule.
"We are concerned that this rule fails to protect against discriminatory insurance practices and could contribute to instability in the individual and small group market, ultimately decreasing access to affordable coverage," AHA wrote in its comment.
Retiree group AARP warned that working Americans, especially those between 50-64, would likely face higher insurance premiums and lose access to “critical health insurance coverage” if the proposed rule goes into effect as written.
“AARP has long raised concerns with the lack of protections and benefits for consumers under AHPs, specifically since AHPs increase the fragmentation of risk pools, which drive up the costs for older Americans,” AARP wrote. “We have serious concerns that the Department’s proposed rule is a step backwards and will once again subject consumers [to] unaffordable costs and to inadequate health insurance coverage,” it added.
The group, which lobbies for elderly Americans, specifically raises concern over the proposed rule’s allowing AHPs variance from the ACA’s 3:1 age band limitation.
“Prior to enactment, health insurers were allowed to discriminate against older workers and charge small businesses in some cases ten times higher for older workers than younger workers, effectively rendering coverage inaccessible for small businesses with older workers,” AARP noted.
AHIP asks DOL to allow sufficient time for states to “ensure that laws and systems are in place for additional AHIP enrollees.”
PhRMA warned that while it supports the administration’s effort to promote consumer choice and affordability, any changes to AHPs should not “undermine the affordability of coverage or robustness of benefits available today.”
The drug lobby called for more guardrails in the final rule, including a prohibition on AHPs excluding small businesses from membership based on employees’ health status. It also called for adequate resources for states and the DOL to work together to create common oversight tools to oversee the plans.
The National Partnership for Women & Families and the American Cancer Society Cancer Action Network both warned that the proposed rule would weaken both the individual and small group markets.
“If healthier individuals and small groups are siphoned from the individual and small group markets, costs will increase and plan choices will decrease for employers and individuals remaining in those markets,” the National Partnership wrote in its comment.
The Pharmaceutical Care Management Association, which represents PBMs and the Association for Accessible Medicines of generic drugmakers, told Healthcare Dive they did not comment on the proposed rule.