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Proposed Rule Seeks to Expand Options for Employer Sponsored Coverage

January 04, 2018

A proposed rule issued by the U.S. Department of Labor would provide new flexibility under the federal ERISA law to allow employers to join together in an employer group or association to offer employer-sponsored health care coverage.

Under the proposed policy, small businesses and trade groups would be able to offer health insurance coverage through “association health plans” (AHP). These plans would be offered outside of the Affordable Care Act (ACA) markets. AHPs may provide less expensive coverage options but will not necessarily offer the full patient protections and benefits assured under the ACA. 

The proposed rule was put forward pursuant to an Executive Order— Promoting Healthcare Choice and Competition Across the United States—issued by President Trump during October that sought to promote health insurance options that do not have to adhere to all of the requirements and protections under the ACA.

The Administration has asserted the goal of promoting competition and bringing down costs for consumers by providing access to alternative insurance options. Many coverage advocates have raised concerns that healthier consumers will take advantage of less-costly, less-generous coverage, leaving the sicker and higher-cost patients to secure coverage through ACA plans; ultimately, undermining the ACA insurance marketplaces.

HAP remains concerned regarding the ability of Pennsylvanians, particularly those with underlying health conditions, to afford health insurance, and the stability of the commonwealth’s health insurance marketplace. 

HAP has identified the following priorities in stabilizing the insurance market and addressing insurance rate increases:

  • Thoughtfully address the needs of Pennsylvanians with pre-existing conditions who do not otherwise have access to health coverage
  • Provide appropriate and sustained financing to meet the needs of these Pennsylvanians as well as those who experience significant health crises and need access to life-sustaining health care
  • Provide appropriate and sustained financing to support access to affordable health coverage for lower-income Pennsylvanians
  • Address health care cost drivers through delivery system reform, value-based payments, and elimination of unnecessary regulatory burdens
  • Encourage health insurers to develop coverage that supports more coordinated and efficient care
  • Promote continuous coverage and market participation for consumers, so they do not opt out of coverage
  • Enhance consumer outreach and enrollment

The proposed rule will be subject to a 60-day comment period.

Please contact Jolene Calla, HAPs vice president of health care finance and insurance, or Laura Stevens Kent, vice president of federal advocacy, with questions.

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