Yesterday a Trump administration Department of Labor rule which expanded the use of association health plans (AHPs) was struck down by U.S. District judge in Washington. (For more information on AHPs see here and here).
AHPs allow for small businesses, sole proprietors, and self-employed owners from the same industry or geographic area to band together and purchase insurance through a trade association as a large group. Purchasing insurance as a large group provides more choices for affordable coverage that meets the needs of the individuals.
Critics of these plans claim they are junk insurance and would siphon off healthy individuals from the ACA markets. However, as I have discussed before, the plans created under these news rules were offering robust health benefits comparable to the ACA and the CBO projected a minimal impact on the ACA markets.
Along with repealing the individual mandate and extending the use of short-term, limited duration health insurance, expanding the use of AHPs were part of the Trump administration’s successful efforts to offer Americans more affordable choices for health coverage.
The ruling is particularly discouraging considering the North Carolina General Assembly was well on its way to aligning the insurance rules in North Carolina to reflect the new federal guidelines. SB 86, the Small Business Health Care Act, passed in the Senate earlier this month. A house version of the bill, HB 464, was introduced in the house earlier this week.
Some may say that this is a huge loss for the Trump administration. However, the real individuals who lost with this ruling are the thousands of employees in small businesses, sole proprietors, and self-employed owners in North Carolina who would have benefited from having the option to purchase health insurance through an association.
It remains unclear what further actions the administration will take following this ruling.
