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Executive Order Eases ACA Rules on Association Health Plans

An executive order would give higher flexibility for association health plans to offer lower premiums with less federal regulation.

Trump signs executive order to lessen Association Health Plan federal regulation

Source: Thinkstock

By Thomas Beaton

- An executive order signed by President Trump will lighten rules on association health plans (AHPs), which could allow groups of businesses to provide lower cost insurance without essential health benefits (EHBs), as reported by multiple news outlets.

The order, which was first hinted at from a Wall Street Journal report, is an attempt to expand consumer access to AHPs through direction from federal agencies and increasing the length of time that consumes can enroll in short-term, limited benefit health plans. The order would also allow health plan consumers to pay for premiums with health reimbursement arrangements (HRAs).

AHPs will also be able to offer consumers the ability to purchase insurance across state lines that is compliant with rates and laws of the state where the coverage is purchased

Criticisms of the order include the suggestion that offering AHPs at a larger scale could entice healthier consumers leave individual ACA insurance markets, causing federally-offered insurance premiums to spike as risk-pools become unbalanced with sicker enrollees.

Groups such as Blue Cross Blue Shield and other payers have said consumers may take advantage of other states’ insurance markets, further destabilizing ACA exchanges nationwide.

“The National Association of Insurance Commissioners, representing state regulators, has long opposed association health plans, saying they are bad for consumers because they can operate outside some state consumer-protection laws,” the New York Times reported.

“In addition, the state regulators said this year in a letter to Congress, proposals to allow such purchasing groups ‘could actually increase the cost of insurance for many small businesses whose employees are not members of an association health plan.’”

The executive order follows cuts to the ACA Navigator program, which slashed 90 percent of ACA enrollment promotion and outreach.

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