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After the end of the Department of Labor’s (DOL) comment period for its planned expansion of association health plan eligibility, the healthcare community awaits a decision.  

The regulation would broaden access to AHPs by allowing employers to form an association on the basis of geography or industry, instead of only industry, trade, or professional association. It would also allow sole proprietors to join AHPs. According to a recent Avalere Health analysis, the proposed rule would have the following impacts 

  • Higher premiums for individual and small group – Premiums are projected to rise in the current individual (2.7% – 4%) and small group (0.1% to 1.9%) markets, relative to current law. This would be largely due to healthier employees shifting to AHPs  
  • Increased number of uninsured – An estimated 130k to 140k individuals will become uninsured, mostly due to increasing premiums in the individual market as healthier individuals move to AHPs.   
  • Additional 2.4M to 4.3M enrolled in AHPs – This represents members switching from the individual market (0.7M to 1.2M) and small group market (1.7M to 3.2M) into the expanded AHPs.   
  • Lower premiums for AHPs – Premiums in the new AHPs are projected to be between $1,900 to $4,100 lower than the yearly premiums in the small group market and $8,700 to $10,800 lower than the yearly premiums in the individual market by 2022. 

During the comment period, several organizations banded together to write a letter stating the new rule would “invite scammers back into the insurance market.”  

The letter, signed by nine stakeholders, asks that the DOL “withdraw or, failing that, substantially delay the proposed regulation…” Also included was a Freedom of Information Act (FOIA) request for the release of important information surrounding Multiple Employer Welfare Arrangements (MEWAs). 

The authors believe the statistics surrounding MEWAs will prove the pending regulation is seriously flawed. However, they speculate that the time it will take to compile the research will be longer than the current comment period. For this reason, the letter concludes with an urgent request that the regulation be withdrawn and repurposed after the MEWA materials are compiled and analyzed. 

On March 20, Christopher Condeluci, principal and sole shareholder of CC Law & Policy, a legal and policy practice that focuses on issues relating to the ACA, testified in front of the Committee on Education and the Workforce, Subcommittee on Health, Employment, Labor, and Pensions (HELP). Condeluci defended the new regulation, breaking his written testimony down into four sections:  

  • Association Health Plans are not the same as short-term health plans – AHPs provide comprehensive coverage as required under the ACA, ERISA, HIPAA, and COBRA  
  • Background on the current treatment of AHPs 
  • The DOL’s proposed AHP regulations 
  • State regulation of AHPs 

 Condeluci went on to conclude that AHPs will provide adequate coverage at a lower cost and that employer members will use these plans to cover comprehensive health coverage to attract and retain talent.  

Other groups, however, vehemently opposed the proposal. The National Employee Law Project (NELP) wrote a letter expressing its strong opposition to the regulation. NELP’s concern centered around their belief that the regulations will have a disproportionately negative effect on low-wage workers. At the end of a long list of concerns, including fraud, ACA loopholes, and the potential for discrimination, NELP states that the proposed law is in violation of the ACA.  

“DOL’s proposal would allow small employers and individuals, who are not subject to the employer mandate of the tax code, to band together to obtain health insurance without any consumer protections, and, as such, conflicts with the text and purpose of the ACA,” the NELP letter stated.  

The Coalition Against Insurance Fraud also aired concerns stating: “Fraudulent AHP operators will exploit vulnerable citizens. History suggests illegal health plans will aggressively exploit vulnerable small businesses if AHP regulatory passes.”  

According to Bloomberg, lawmakers on the House Committee of Education and the Workforce are split on the issue. Rep. Virginia Foxx (R-NC), committee chairwoman, and Tim Walberg (R-MI), chairman of the subcommittee on HELP, submitted comments praising the DOL’s efforts to open up affordable health care to small businesses.  

Meanwhile, Democrats, led by ranking Democratic committee member Rep. Bobby Scott (D-VA), also addressed issues of fraud in their letter. The letter concludes by calling this proposal “a slightly better deal for a few, a bad deal for many, and a very bad deal for those with preexisting conditions.”  

Stakeholders will have to wait and see if the DOL will take the negative feedback into consideration and revise or rescind the proposal, or continue to move forward as originally planned.  

The views and opinions expressed by the authors on this blog website and those providing comments are theirs alone, and do not reflect the opinions of Softheon. Please direct any questions or comments to 

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