CAHC Comment Letter on Proposed Rule Expanding Association Health Plans

The Honorable R. Alexander Acosta
Secretary
U.S. Department of Labor

RE: Definition of Employer – Small Business Health Plans RIN 1210-AB85

Dear Secretary Acosta:

The Council for Affordable Health Coverage (CAHC) welcomes the opportunity to comment on the proposed rule regarding association health plans (AHP) and expanding the definition of “employer” under Section 3(5) of the Employee Retirement Income Security Act of 1974 (ERISA). CAHC is a broad-based alliance with a singular focus: bringing down the cost of health care for all Americans. Our membership represents a broad range of interest-organizations representing small and large employers, manufacturers, retailers, insurers, patient groups, and physician organizations. As such, we appreciate the opportunity to comment on this proposed rule as it has implications for the continuing evolution of an operational, competitive, and affordable US health market.

BACKGROUND

Employers are the largest purchasers of health care services and coverage in this country, and they are leading the way in innovation and the shift toward value in the private market. While premiums in the employer market, where the vast majority of Americans receive their coverage, have remained relatively stable compared to the individual market, costs are rising more than twice as fast as wages. This is largely due to rapid increases in the cost for medical services, and federal mandates and regulatory burdens under the Affordable Care Act (ACA). In fact, these rising costs are a primary contributor to premium growth, and as costs continue to outpace economic growth, it makes coverage less affordable and more out of reach for millions of Americans.

The CAHC supports efforts to expand options in the health care marketplace for employers to pool together and lower costs. AHPs have been a concept long supported by business owners to make health insurance both accessible and affordable to their employees and families. AHPs allow employers of similar industries or geographic areas to form pools which would have greater leverage in the health care marketplace and could manage the administrative costs of plans in a more cost-effective manner. Within this comment letter, we respectfully offer several recommendations we believe would strengthen the intended outcomes of the proposed rule.

RATING RULES

By expanding the definition of “employer,” the proposed rule makes it possible for businesses of all sizes to join AHPs, thereby sharing administrative expenses and leveraging access to benefits at more cost-effective price points. CAHC recommends, in the interest of maintaining a stable risk pool under the proposed rule, that newly forming AHPs be required to establish annual open enrollment periods for employers and employees entering the AHPs. Further, CAHC recommends that AHPs assess participating The Honorable R. Alexander Acosta