On June 21, the House of Representatives passed H.R.2868, the Association Health Plans Act (AHPA). The partisan vote was 220 to 209.

The AHP bill expands association health plans by amending ERISA (the statute governing welfare benefit plans) to allow a group of employers to band together to sponsor a welfare benefit plan that is a group health plan regardless of whether the participating employers are in the same industry. Self-employed individuals can qualify as a participating employer. And the bill allows establishment of an AHP with only self-employed individuals participating. Under the bill, the AHP must provide coverage to at least 51 employees (and all the employees of the participating employers can be aggregated to reach the 51-employee threshold) and to no one else outside of the association. The association sponsoring the AHP must be at least two years old and must have been established “in good faith” for reasons other than providing health care coverage.

Other conditions include a requirement that membership in the group or association cannot be conditioned on any health status-related factor, and a rule that makes health coverage available to all employer members of the association regardless of any health status-related factor. The bill also includes governance requirements, and authority to set actuarially-sound premium rates using a modified community rating methodology. The bill expressly prohibits any health insurer from sponsoring an AHP. However, the bill does allow health insurers (and their affiliates) to participate in an AHP, and to “provide services such as assistance with plan development, marketing and administrative services” to an AHP.

Prospects: This is a partisan bill that is unlikely to be considered in the Senate.

NAIFA Staff Contact: Michael Hedge – Senior Director – Government Relations, at mhedge@naifa.org.