On the DOL’s Final Rule on Association Health Plans

Following is a statement by Christine Owens, Executive Director, National Employment Law Project:

“Today, the Trump Administration took a concrete step aimed at accomplishing what the American people do not want and Congress refused to do: roll back the protections of the Affordable Care Act (ACA). The Labor Department issued a final rule that radically expands access to largely unregulated health insurance through so-called Association Health Plans (AHPs). As a result, the administration has opened the floodgates to ‘fake’ health insurance, fueling the potential for a new era of widespread health insurance fraud and abuse.

“This new rule undermines the ACA in several ways:

  • It allows AHPs to cherry-pick what risks to cover and what benefits to offer, siphoning younger and healthier individuals away from state-regulated markets, and leaving millions of sicker individuals at risk of losing their health insurance.
  • It exempts AHPs from the ACA consumer protections that apply to small businesses and individuals.
  • It permits AHPs to discriminate based on age, sex, occupation and a variety of other factors.

“The Trump Administration is intentionally building upon the AHP model, which has a long history of fraud, failure, broken promises, and unpaid medical bills. Before the ACA, small business owners who wanted health coverage for themselves and their employees sometimes turned to AHPs that claimed to offer just what they needed—affordable coverage. Unfortunately, participants often found out, too late, that the coverage was illusory and medical bills were their responsibility to pay. After the ACA, small business owners had no need to resort to these suspect plans.

“The real effect of this action will not be to make less costly, less regulated insurance broadly available. Instead, it will create winners and losers among small employers, possibly benefitting somewhat larger groups of the young and the healthy, while likely unleashing a new wave of fraud on the vulnerable and threatening the very underpinnings of the ACA.”


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