Proposed Rule Limiting Association Health Plans Will Help Stabilize Costs for Small Businesses

“We are thrilled the U.S. Department of Labor is taking action to rescind a Trump Administration policy that sought to expand association health plans. While some claim that association health plans can lower costs for some small businesses, they would in fact harm small firms overall by causing higher premiums, unbalanced risk pools and lower-quality insurance. 

We have spent years calling for this rule to be reversed because it would have greatly undermined the benefits of the Affordable Care Act (ACA) for the small business community. Association health plans may make it easier for a select number of small businesses with younger and/or healthier employees to band together to purchase insurance across state lines. However, the tradeoff is that this would cause the insurance market for small businesses to split into two, leading to major spikes in premiums for small firms that remain in the traditional small group market. 

What’s more, these multi-state plans offer fewer consumer safeguards. In fact, they do not have to cover basic benefits like prescription coverage or maternity care because they are not subject to certain rules established by the ACA. 

This move by the Biden-Harris Administration will prevent numerous harmful outcomes of association health plans. We look forward to commenting on the proposed rule and urge the Department of Labor to adopt it swiftly.”

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