Today, President Trump issued an executive order directing federal agencies to expand access to association health plans (AHPs). The order also instructs agencies to roll back federal restrictions on short-term health plans and allow consumers to pay insurance premiums with health reimbursement arrangements (HRAs).
Perhaps the most significant part of the executive order is a direction to the Department of Labor (DOL) to revamp federal rules to allow for the broad expansion of AHPs. AHPs let small businesses—and in some cases individuals—band together to purchase health insurance or self-insure. However, AHPs would likely not be subject to Affordable Care Act (ACA) minimum coverage requirements, and are generally exempt from state regulatory oversight, including many important state insurance regulations and consumer protections.
The intent of the executive order is to provide more health insurance options at lower costs. However, many organizations, including the Big “I,” have serious concerns about how expanding the use of AHPs would impact current health insurance markets and state insurance regulations. According to the National Association of Insurance Commissioners, AHPs would preempt state insurance law, threaten the stability of the small group market and provide inadequate benefits and insufficient protection to consumers.
The executive order, however, leaves much of the implementation details for the operation of AHPs to federal agencies, and the Big “I” expects a significant implementation process as rules and regulations are drafted. The Big “I” intends to weigh in with the Administration and Congress throughout the rulemaking process.
The executive order also calls for restoring access to short-term health plans. These temporary plans are heavily regulated at the state level, but they were significantly curtailed by the Obama Administration. Last year, the Big “I” submitted comments to the Department of Health and Human Services (HHS) in support of allowing continued access to state-regulated short-term plans, which provide an important option for consumers.
Finally, the executive order would also direct the Treasury Department, HHS and DOL to explore how consumers can more broadly use HRAs, including using HRAs to pay for health insurance premiums. This aims to roll back an Obama Administration rule that blocked the use of HRA pre-tax dollars to pay for health plans.
Wyatt Stewart is Big “I” senior director of federal government affairs.