In June 2018 the U.S. Department of Labor announced an expansion of access to health insurance set to take effect September 1, 2018, via Association Health Plans (AHP). According to the Department of Labor (DOL), AHP’s “work by allowing small businesses, including self-employed workers, to band together by geography or industry to obtain healthcare coverage as if they were a single large employer. Association Health Plans will also be able to strengthen negotiating power with providers from larger risk pools and greater economies of scale.”
As such, organizations like us, your local Chamber of Commerce would have the ability to offer our members a means to secure health insurance. At the moment, however, this is not possible. In late July 2018 a lawsuit was filed by Attorneys General from New York, Massachusetts, District of Columbia, California, Delaware, Kentucky, Maryland, New Jersey, Oregon, Pennsylvania, Virginia, and Washington, asking the court to vacate the final AHP rules, claiming that the rules conflict with clear statutory structure of the Affordable Care Act (ACA) by permitting small employers to circumvent consumer protections by forming large association health plans. This suit alleges the rules violate the text, structure, and purpose of the ACA, which applied stronger protections in the individual and small group markets than in the large group market, in part because of the inherent economic incentives of large employers. The suit also claims the final rules conflict with the ACA, ERISA, and established case law by enabling a self-employed individual with no employees to form a group health plan. Finally, the lawsuit claims the AHP rules are arbitrary and capricious because the DOL failed to justify its departure from the last forty years of settled law under ERISA and overstepped its authority to circumvent the ACA.
This currently prevents Chambers of Commerce in Pennsylvania from offering these plans until the issue is resolved in court. We will continue to keep you posted as this case progresses. It is our understanding that only Chambers of Commerce and other associations by geography are affected by this suite. Associations focused around a particular industry can still make these AHP plans available. It is also clear that this prohibition only affects States that are a party to the suite, so Chambers of Commerce in States that are not part of the suite can freely offer these AHP Plans to their members.