The Trump administration took the first step toward clearing the path for the sale of health insurance across state lines.
In another move toward dismantling the Affordable Care Act, the Department of Labor announced a proposed rule to expand the offering of small business health plans, also known as association health plans. The proposed rule will be published Friday.
Under the proposal, small businesses and sole proprietors would have more freedom to band together to provide health insurance for employees.
The proposed rule applies only to employer-sponsored health insurance. This would allow employers to join together as a single group to purchase insurance in the large group market.
The Department of Labor said this move would open health insurance coverage for millions of Americans and their families by making it more affordable for thousands of small businesses and sole proprietors.
By joining together, employers may reduce administrative costs through economies of scale, strengthen their bargaining position to obtain more favorable deals, enhance their ability to self-insure, and offer a wider array of insurance options, the DOL said.
As proposed, the rule would:
- Allow employers to form a small business health plan based on geography or industry. A plan could serve employers in a state, city, county or a multi-state metro area, or it could serve all the businesses in a particular industry nationwide;
- Allow sole proprietors to join small business health plans.
Under the proposed rule, small business health plans cannot charge individuals higher premiums based on health factors or refuse to admit employees to a plan because of health factors. The DOL’s Employee Benefits Security Administration will monitor these plans.
The proposed rule will be published in the Federal Register on Friday, and will be available for public comment for 60 days.
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.
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