Published: Fri, June 22, 2018
Medical | By Marta Holmes

Enzi: Labor ruling will help small businesses provide health insurance

Enzi: Labor ruling will help small businesses provide health insurance

"Many of our laws, particularly Obamacare, make healthcare coverage more expensive for small businesses than large companies", said U.S. Secretary of Labor Alexander Acosta. The core objective of an AHP is to allow small employers to band together and obtain coverage in the large group insurance market, which generally imposes fewer coverage requirements.

Enzi has championed the idea of allowing Small Business Health Plans, also known as Association Health Plans, for many years.

Here in Iowa, Gov. Kim Reynolds in April signed legislation that will allow small employers to form association health plans, in an effort to provide new options for lower-cost coverage with fewer mandates.

The Congressional Budget Office has estimated that an additional 4 million people will enroll in association health plans by 2023, including 400,000 people who would otherwise be uninsured.

"Under Obamacare, small business owners in our state have struggled to find affordable health insurance choices for their employees and their employees" families", Doak said. "The Department of Labor's new rule will hopefully provide that negotiating power that small businesses wouldn't have on their own, which in turn benefits their workers".

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At this point, it appears that the anti-discrimination protections that apply to large business will also be applied to AHPs. The final rule generally is consistent with the proposed rule published on January 5, 2018, and allows employers and sole proprietors to band together on the basis of geography or industry.

They could be marketed across state lines to businesses in a common industry, or they could be sold to self-employed people.

Virginia was one of the first states to see requests from health insurers for huge premium increases of up to 64%, many of which cited health care decisions by the Trump Administration as driving up costs. According to the final rule, a substantial business goal exists if the association would be a viable entity in the absence of sponsoring an employee benefit plan.

Department of Health and Human Services Secretary Alex Azar echoed Acosta in a statement, saying that the changes will allow more Americans to access affordable coverage.

The final rule broadens the definition of an employer under the Employee Retirement Income Security Act to allow more groups to form AHPs as an alternative to the Affordable Care Act (ACA) health exchanges.

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These so-called "association health plans" would have to cover people with pre-existing health conditions.

But these insurance plans would not be subject to requirements under the Affordable Care Act (ACA), commonly called Obamacare, which included mandatory coverage for a set of 10 essential health benefits, such as maternity and newborn care, prescription drug costs and mental health treatment.

New York-based Oscar Health, a technology-focused health insurance company, has announced its plans to expand into six new markets across Florida, Arizona, and MI - and three additional large metro areas in Ohio, Tennessee, and Texas.

The new rules substantially expand the circumstances under which association health plans can be created and purchased. This means four million people who are underinsured - as well as a continued rise in premiums for those individuals who maintain their PPACA insurance plans.

Avalere Health, a Washington-based consulting firm, estimated last winter that the rules would lead to lower premiums by 2022 for those with association health plans - averaging $2,900 a year less than in the ACA marketplace for small businesses and $9,700 less compared with the individual market.

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The AHP rule does not preempt state laws, so states may continue to regulate AHPs as multiple employer welfare arrangements, whether fully insured or self-funded.

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