By Virgil Dickson
June 19, 2018 - Modern Healthcare
The Trump administration on Tuesday unveiled the final
version of a rule that allows more small businesses and self-employed workers to
band together to buy insurance.
The final rule, released by the
Department of Labor, is part of the administration's plan to encourage competition in the health
insurance markets and lower the cost of coverage. It broadens the definition
of an employer under the Employee Retirement Income Security Act of 1974, or
ERISA, to allow more groups to form association health plans and bypass ACA
rules. ERISA is the federal law that governs health benefits and retirement
plans offered by large employers.
"The Trump administration hopes to
level the playing field between large companies and small businesses by
expanding access to association health plans," Labor Secretary Alexander Acosta
said on a call with reporters Tuesday. "This expansion will offer millions of
Americans more affordable coverage options."
Acosta said that as many as
4 million people will gain coverage under the new plan offerings in the coming
years. That includes 400,000 people who previously did not have insurance
coverage, he said.
The government's estimates are in line with Avalere Health's similar
prediction that as many as 4.3 million people will leave the individual and
small group insurance markets to enroll in association health plans over the
next five years.
Mostly healthy, young people will make the exodus to
association plans, which would spark rising premiums in the ACA individual and
small group markets. Avalere projected premiums would increase by as much as 4%
between 2018 and 2022. The healthcare consulting firm's analysis was funded by
the insurance industry lobbying group America's Health Insurance
Plans.
Under the rule, association health plans cannot restrict
membership based on health status or charge sicker individuals higher premiums,
which were two of critics' biggest concerns about expanding association health
plans. Experts say that protections will help mitigate association plans'
negative effects on the marketplace.
Federal regulations had made it
difficult for association health plans to meet ERISA's large employer insurance
requirements. Many existing association plans had to comply with small group and
individual insurance market regulations, including protections for people with
pre-existing medical conditions and covering the ACA's 10 essential health
benefits.
Small businesses and self-employed workers must be part of the
same industry to form an association health plan under the previous rules. The
new rule would change that, allowing workers in unrelated professions to band
together to obtain coverage through an association health plan so long as they
are in the same geographic region, explained Chris Condeluci, a health policy
consultant who was a Senate GOP staffer when the ACA passed.
The rule
also would allow association health plans made up of a members of the same
industry to offer coverage to workers across the country.
Self-employed
workers can join association plans under the new regulation, and groups that
want to form an association health plan don't need to have another purpose
beyond providing health coverage to members.
Several hospitals and
clinician groups warned the federal government prior to the rule's finalization
that uncompensated-care costs could soar if access to these plans
expanded.
However, they noted association health plans pose a unique
threat to providers because they have a history of fraud spanning decades and
the proposed regulation doesn't seem to strengthen oversight of such plans
adequately, according to the American Heart Association. There have been several
lawsuits over the years from patients and employers over unpaid medical
bills.
"Many plans collected premiums for health insurance coverage that
did not exist," Dr. John Warner, president of the American Heart Association,
said in a comment letter dated March 5."Some plans did not pay medical claims,
leaving businesses, individuals, and providers exposed to millions of dollars in
unpaid bills."