April 12, 2019


In This Issue
Fast Facts
Senior Issues, State Innovations and Healthcare Cost Containment Dominate NAICís Spring Agenda
NAHU Submits Comments on the Trump Administrationís Drug Rebating Rule
Medicare-for-All Legislation Introduced in the Senate
Republicans Introduce AHP Legislation to Provide Legal Path for Invalidated Plans
State Spotlight: Oklahoma Mirrors Trump Administration with PBM Regulation
Healthcare Happy Hour: Special Guest Discussion on Balance Billing
Register for Next Weekís Webinar on Frequently Asked Compliance Questions
Applications Are Now Open for NAHUís Legislative Council
CMS Announces Agent and Broker Summit
Register Now for the State of the Long-Term Care Insurance Industry Webinar
HUPAC Roundup: Defining the Center
What We're Reading
E-mail the Editor
Visit the NAHU Website
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Republicans Introduce AHP Legislation to Provide Legal Path for Invalidated Plans
On Thursday, Senator Mike Enzi (R-WY), along with two dozen Republican co-sponsors, introduced S. 1170, legislation that would codify into law the expansion of Association Health Plans, as the immediate viability of the Trump Administration’s rulemaking is uncertain. Last month, a federal court struck down the AHP rule as a deliberate and illegal “end run” around the ACA. The Administration is currently considering its options and could rescind the rule, try to revise the rule, or appeal the court’s decision. In the interim, the final rule issued last June is still in effect as the legal challenge continues to go through the courts.

The legislation introduced this week would establish in statute the new AHP pathways for small businesses so that they could continue to be offered should the Trump Administration’s regulatory workaround ultimately be invalidated. While the legislation attracted two dozen Senate Republicans as co-sponsors and Senate Majority Leader Mitch McConnell (R-KY) would likely support advancing the legislation in the chamber, it is unlikely to be considered in the House with the current Democratic majority. Without a legislative fix to the invalidated rule, all of the AHPs established under the Trump Administration rulemaking would have their legal status in jeopardy, unless the administration is able to release updated rules that are deemed permissible, or a higher court overrules the lower court and allows the plans to operate under the original regulation.

The rule had three staggered implementation periods: the first began on September 1, 2018, and allowed for any new or existing associations to establish a fully insured AHP; the second began on January 1 and allowed existing associations that sponsored an AHP on or after the date of the final rule to establish a self-funded AHP; and on April 1 all other associations (new or existing) are able to establish a self-funded AHP. Nearly three dozen AHPs have formed under the new rule, and roughly 4 million Americans had been expected to enroll in an AHP by 2023.

The ruling by U.S. District Court Judge John Bates, a George W. Bush appointee, was that these plans don’t meet the coverage rules of the ACA, and arguably violate ERISA. He specifically called out the direct violation of ERISA in the AHP rule’s attempt to change the definition of employer to allow an association to be formed for the sole purpose of offering health insurance – as long as one other service is provided to members – and to allow working owners with no employees to be counted as both the employer and employee in joining a group AHP. NAHU specifically raised our concerns with potential issues of conforming the AHP rule with ERISA as part of comments we submitted on the draft proposal last year.
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