Insurance Commissioner Pursues Clarity as Federal Government’s Association Health Plans Rule Creates Ambiguity and Threatens Consumer Protections

HARRISBURG, Pennsylvania, Aug. 2 -- The Pennsylvania Insurance Department issued the following news release:

Pennsylvania Insurance Commissioner Jessica Altman today sent a letter to the U.S. departments of Labor and Health and Human Services outlining the state Insurance Department's position on the implementation of a federal rule aiming to expand association health plans.

"While the new rule creates ambiguity and has the potential to undermine important consumer protections, this letter creates clarity by articulating the Insurance Department's longstanding regulatory approach for association health plans," Altman said. "Once again, it falls to the states to provide clarity to the marketplace following ambiguous and potentially harmful administrative actions being taken by the Trump Administration. It's critical that our department promptly address the federal discrepancies and assert the Insurance Department's obligation to uphold the law and duty to protect consumers in Pennsylvania."

The substance of the Insurance Department's letter aligns with the concerns raised in a lawsuit Pennsylvania's Attorney General recently joined with 11 other attorneys general to block the rule's Sept. 1 implementation.

Association health plans are health insurance plans for employees purchased through an association or group of multiple small employers, typically organized around a common professional interest. The federal government's rule, which was finalized in June, expands the definition of the term "employer" to allow more employers to form associations to buy insurance in the large-group market. However, the federal rule also emphasizes that states are not pre-empted by the new standards and retain their authority to regulate the business of insurance and the types of association health plans addressed in this rulemaking.

"Pennsylvania law contains important protections and limitations related to association health plans, which is why clarifying what is permissible under Pennsylvania law, as outlined in this letter, is critical," Altman said.

Altman shared her concerns with the proposed rule in March through a letter to the federal government and reiterated those concerns when the rule was finalized in June, highlighting how the rule opens the door to less comprehensive health care coverage and invites discrimination against employees that may have pre-existing conditions.

"I remain concerned that this rule will allow for substandard coverage that will limit consumers' access to comprehensive health care, and I am committed to ensuring that our laws will continue to provide necessary protections to consumers," Altman said.

A copy of the letter is available on the Insurance Department website (https://www.insurance.pa.gov/Documents/Press%20and%20Communications/Testimonies%2c%20Remarks%2c%20Speeches/DOL%20HHS%20Letter%208.2.18.pdf).