On Monday, NAHU submitted comments to the Labor Department on the proposed regulation to expand Association Health Plans (AHPs). Their proposal was prompted by an executive order issued by President Trump on October 12 and calls for redefining “employer” under ERISA to allow more groups to qualify as associations. It would also treat health coverage sponsored by an employer association as a single group health plan that would not be subject to the ACA’s essential health benefits. Our comments specifically addressed the framework for AHPs, the roles of sole proprietors and agents/brokers, and regulations for self-funded and large group plans, among other issues. Summary of our comments:
Role of the Broker
- AHP framework should include the option of working with a local broker for both plan implementation and long-term customer-service needs.
Regulation of Self-Funded Plans
- NAHU plans to advocate not expanding the scope of this proposal to include self-funded MEWA arrangements.
Inclusion of Large Groups
- NAHU believes a few large groups will find AHP participation an attractive option so we recommend the regulation either do more to incent large-group participation or exclude it explicitly.
Any change to federal regulation will need to feature a reliable standard to ensure that participants genuinely are the owners of small businesses.
We will suggest an open-enrollment period and strict business verification standards, similar to those used in Maryland and Delaware today.
We plan to oppose the requirement that a sole proprietor does not have another coverage option as problematic and unenforceable.
We have concerns about the logistics of bylaws drafting and the potential for hidden language about fees, length of membership term, lack of local presence, service support and other elements that may not be beneficial.
State Regulation and Jurisdictional Issues
We request detailed guidance about how different state regulators and the federal government will interface so that clear lines of authority and consumer support are evident from the beginning.
Since these are proposed rules from the Department of Labor, the advocacy process is different than with proposed legislation. Legislation must move through both the House and the Senate before reaching the president’s desk, and there is often much time to advocate changes in a bill or to effectively “kill” a bill. The regulatory process, however, is much different. When a proposed rule is issued on a topic, this signals that the Administration will be going forward with rules on that issue, although there is the opportunity to submit comments to advocate for changes to the final rule. The likelihood that the Administration would not go forward with their proposed rule in any manner is extremely unlikely. In light of this process, NAHU traditionally comments on rules, even those we may be opposed to, in an effort to make the final rules come out in the best way possible for agents and brokers as well as the health insurance industry. Comments of opposition or no comments at all weaken our stance and long-term effectiveness with rulemaking agencies.
We propose the development of an AHP-specific addendum to the Summary of Benefits and Coverage and Uniform Glossary, to be drafted by the NAIC statutory working group on Summaries of Benefits and Coverage.
We will continue to comment on all relevant rulemaking to ensure our seat at the table as we expect a marked increase in rulemaking over the next few years from the Trump Administration. As these rules are proposed and finalized, NAHU will provide updates and resources through the Washington Update and Compliance Corner.