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1 1 (February 9, 2018)

handle is hein.crs/govcjux0001 and id is 1 raw text is: Association Health Plans: Some Key Aspects of the Labor Department's Proposed Rule February 9, 2018 Association health plans (AHPs) are in the spotlight due to a recent Labor Department proposed rule that aims to broaden access to this type of health insurance coverage. The proposed rule responds to an October 2017 executive order issued by President Trump, which directed his Administration to consider administrative initiatives that expand choices and alternatives to Obamacare plans and increase competition to bring down costs for consumers. Some have applauded the Trump Administration's efforts to make health coverage more affordable and readily available through AHPs. Others have raised concerns that the proposed rule would promote coverage that lacks important consumer protections and detrimentally impact other segments of the insurance market. As the debate continues over the merits of the proposed rule, the legal framework behind this regulatory change may be examined. This Sidebar provides brief background on AHPs and the executive order, an overview of some of the key aspects of the proposed rule, and a discussion of certain legal issues that may be considered if the rule is finalized. Background AHPs are a common type of insurance arrangement allowing groups of individuals or small employers to band together to purchase health coverage. Sponsors of these plans include various organizations, such as trade associations and chambers of commerce. The basic idea behind AHPs is to enable its members to obtain health insurance on similar terms as large entities. While advocates of AHP coverage assert that these health plans allow small groups and individuals to pool their resources and purchase coverage at better rates than they would be able to do on their own, others note numerous instances where multiple- employer AHPs failed to pay claims because of fraud or mismanagement. Critics also argue that if AHPs are permitted to provide skimpier benefits (and cheaper coverage) compared to rest of the individual and small group insurance market, healthier groups of individuals may gravitate to AHPs, but a disproportionate number of sicker individuals will stay with insurers offering more comprehensive benefits. Some claim such a scenario would drive up health care costs overall. President Trump's executive order tasked the Labor Secretary with evaluating measures that would address AHPs under the Employee Retirement Income Security Act (ERISA), a comprehensive federal scheme for the regulation of employee benefit plans established or maintained by private-sector Congressional Research Service https://crsreports.congress.gov LSB10078 CRS }NStGHT Prepaed for Membeivs and Cornm ittees o4 Cor~qress ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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