By John Falardeau
On June 19, the U.S. Department of Labor released a long-awaited final rule expanding the availability of alternative insurance plans that do not need to meet the 2010 Affordable Care Act’s benefit requirements. The rule was handed down despite deep concerns from consumer advocates, state officials and physician groups, including the American Chiropractic Association (ACA).
The rule will extend so-called “association health plans,” which allow insurance companies to skirt benefit requirements and other parts of the 2010 law. President Donald Trump heralded the new rule in a speech to the National Federation of Independent Business when the policy was made final on Tuesday, saying “You’re going to save massive amounts of money and have much better health care. It’s going to cost you much less.”
That all may very well be true, but will the dearth of benefits envisioned in these news plans really leave the consumer with much health insurance? The new association health plans will not have to comply with the health law's limits on higher premiums based on age or gender and many fear that that insurers who offer these plans, which can exclude essential services and quite possibly chiropractic services, would attract sicker consumers.
Currently, association health plans allow businesses to band together to leverage more power in negotiating insurance rates. The new rule amends the definition of “commonality” under the Employee Retirement Income Security Act (ERISA) to allow businesses in different industries located in the same geographic area to join forces for the purposes of buying insurance. This includes metropolitan regions that span multiple states, which moves toward fulfilling President Trump’s campaign promise to allow the purchase of insurance across state lines. Employers were previously required to be similar businesses and be connected for a principle reason other than health insurance in order to qualify to offer an association health plan.
The Congressional Budget Office expects approximately 4 million people will sign up for the plans, including 400,000 individuals currently uninsured. However, state insurance commissioners and other state officials have raised concerns that the ambiguity between federal and state regulations, which is already a murky area under ERISA, may only lead to further chaos.
It is also important to note that association health plans are a type of Multiple Employer Welfare Arrangements (MEWAs) that have long been jointly regulated by both federal and state authorities. The Department of Labor states in the rule that "the final rule does not modify existing state authority" and that "nothing in the rule changes this joint structure, or is meant to reduce the historically broad role of the States when it comes to regulating MEWAs, including AHPs."
Under this joint structure, the federal provider nondiscrimination provision (Section 2706(a) of the Public Health Service Act) would continue to apply, but a state insurance equality/ nondiscrimination law would apply only if a MEWA is not “fully insured,” and the law's effect is not inconsistent with ERISA. The Department declined to provide more guidance on which state laws may fall into this category. In addition, while Section 2706(a) continues to apply to MEWAs, there has been a general reluctance on the part of state and federal agencies to enforce this law.
Finally, the definition expansion of a "group health plan" to include AHPs as MEWAs is intended to remove more individuals from certain requirements of the Affordable Care Act, including and most especially "Essential Health Benefits" (EHB) requirements. As more individuals and small employers join AHPs, more plans will evolve that will no longer be subject to EHB requirements. Proponents of AHPs argue that such a move will reduce overall plan costs as AHP plans are free to select covered benefits. Opponents, such as the attorneys general for New York and Massachusetts who plan to sue over the final rule, say the rule will shrink "critical consumer health protections."
ACA has always maintained that implementing plans designed to usurp traditional state authority and lessen services available to consumers only leads to a “race to the bottom” in health care, misleading patients into “phantom” insurance policies with little benefits. ACA will continue to monitor this issue and urges chiropractic state associations to be especially vigilant regarding possible action related to this rule on the state level.
John Falardeau is ACA’s senior vice president for public policy and advocacy. Follow ACA on Twitter @ACAontheHill for more updates affecting the chiropractic profession from Washington, D.C.