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Final Rule on AHPs Issued

The Department of Labor (DOL) has issued a final rule that expands consumer availability of association health plans (AHPs) starting on September 1, 2018.
June 26, 2018

The Department of Labor (DOL) has issued a final rule that expands consumer availability of association health plans (AHPs) starting on September 1, 2018. The rule will make it easier for small firms and individuals to band together across state lines in association health plans governed by the Employee Retirement Income Security Act (ERISA). The new rule also maintains state regulators’ oversight of these policies, to an extent.

Consumer groups, state officials and Blue Cross Blue Shield plans have long opposed such ideas. They say association health plans will tend to attract employers with younger, healthier workers, leaving behind sicker people in more comprehensive, more expensive plans. AHPs are not required to provide the essential health benefits (EHBs) package included in the Affordable Care Act (ACA).  People with serious illnesses like cancer could face “ever-increasing premiums for comprehensive coverage,” said Chris Hansen, the president of the lobbying arm of the American Cancer Society.

Similar health plans have a history of fraud and abuse that have left employers and employees with hundreds of millions of dollars in unpaid medical bills. The problems are described in dozens of court cases and enforcement actions taken over more than a decade by federal and state officials. State regulators and insurance experts worry the new rule will lead to a spike in insurance fraud and insolvencies that plagued consumers and healthcare providers in the past. Similar multiple employer health plans (MEWAs) racked up $252 million in unpaid bills, according to a 2004 Government Accountability Office report and twice that number were left without coverage between 1988 and 1991, according to a 1992 GAO report.

The attorneys general of New York and Massachusetts announced last Wednesday they plan to file a lawsuit to block implementation of the rule because they say it will “invite fraud, mismanagement and deception.”

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