Trump Administration Finalizes Association Health Plan Rule
This week, the Trump Administration released a final rule that would allow small businesses and trade groups to band together to purchase health insurance, known as “association health plans”. This move is strongly opposed by the National Council because it will expose more consumers to limited coverage health plans, including plans that lack mental health and substance use disorder (SUD) benefits. This final rule is the result of a 2017 executive order President Trump signed that directed federal agencies to loosen restrictions on association health plans (AHPs) and short-term health insurance to create less comprehensive coverage options.
SUMMARY OF FINAL RULE
The Department of Labor’s (DOL) final rule would expand association health plans (AHPs), also known as Small Business Health Plans, to small employers, sole proprietors, self-employed individuals and their families. The rule, which applies only to employer-sponsored health insurance, would allow employers to join together as a single group to purchase insurance in the large group market. Unlike the proposed rule, the final rule further requires that an association have at least one substantial business purpose unrelated to providing health coverage to its employer members and their employees, even if the primary purpose of the group or association is to offer such coverage to its members. AHPs can be organized on the lines of a geographic area (that do not exceed state lines or the same metropolitan area) or a specific industry or profession. Most notably, AHPs are exempt from many critical Affordable Care Act (ACA) consumer protections.
IMPACT ON MH/SUD COVERAGE
During the rule’s comment period, the National Council for Mental Wellbeing raised serious concerns with how these changes would negatively impact Americans’ access to quality and affordable health care. The National Council is disappointed that the final rule continues to exempt AHPs from many of the consumer protections created by the ACA, including insurance standards such as the Essential Health Benefits, premium rating rules and risk pooling. Specific to mental health and SUD care, the final rule would harm:
- Coverage of Essential Health Benefits (EHBs): The ACA’s essential benefits created a minimum set of health benefits small group and individual health plans must cover. The EHBs explicitly name mental health and SUD treatment as required benefits. With this requirement removed for AHPs, the new rule encourages plans to pursue less generous and more narrow benefit designs that would increasingly harm and discriminate against consumers living with mental illness and/or substance use disorders.
- Protections from Discriminatory Protections: The proposed rule makes clear that AHPs are not allowed to discriminate or restrict participation in AHPs based on pre-existing health conditions. However, this protection does not prohibit health plans from denying coverage of certain services nor does it protect individuals from other discriminatory practices such as higher cost-sharing.
- Mental Health/SUD Parity: The federal parity law states that if health plans offer mental health and SUD treatment benefits, that they do so at parity with physical and surgical health benefits, but only if they offer MH/SUD benefits as part of their overall benefits package. The proposed rule, relieving AHPs of the required essential benefits including MH/SUD benefits, would erase years of progress in the insurance market of offering quality mental health and addiction coverage at parity with physical and surgical health care services. This rollback of parity protections is particularly alarming in light of recent reports uncovering a dramatic lack of parity compliance prior to the ACA’s essential benefits.
AHPs can start being offered to consumers as soon as September 1st. The Trump Administration is next expected to release a similar final rule encouraging the expansion of short-term health plans. The National Council and three partners this week released a fact sheet highlighting these plans’ lack of coverage for critical mental health and SUD benefits.