H.R. 2528: Association Health Plans Act

This bill, titled the "Association Health Plans Act," aims to amend the Employee Retirement Income Security Act (ERISA) of 1974 to provide clearer definitions and regulations regarding association health plans. Here are the key elements of what the bill proposes:

1. Clarification of Employer Status

The bill establishes that a group or association of employers can be treated as an "employer" for the purposes of providing employee welfare benefit plans, which include health insurance. This status applies regardless of whether the employers belong to the same industry or profession.

• To qualify as an employer, the group must:
  • Maintain a health plan covering at least 51 employees when aggregating employees from all member employers.
  • Have been actively existing for at least two years.
  • Be formed for purposes other than providing medical care.
  • Not discriminate based on health status when providing membership or coverage.
  • Make plan coverage available to all employer members regardless of health-related factors.
  • Not offer coverage to individuals outside the employee pool.
  • Have a governing board composed of at least 75% employer members elected by participating members.
  • Not be a health insurance issuer or controlled by one.

2. Inclusion of Self-Employed Individuals

The bill allows self-employed individuals to be treated as both employers and employees when they join an association health plan. This means they can benefit from the same health coverage options available to traditional employees, provided they meet specific criteria.

3. Premium Establishment and Risk Pooling

Association health plans can set their premium rates based on a modified community rating methodology. This allows them to group claims across all participating members to determine base rates. Additionally, they can adjust individual rates based on the specific risk profile of each employer member. If a group consists solely of self-employed individuals, they must be treated as a single risk pool, leading to uniform premium rates.

4. Discrimination and Pre-existing Condition Protections

The bill enforces rules prohibiting:

• Any eligibility requirements that discriminate based on health status.
• Charging higher premiums based on health status factors.
• Denying coverage based on pre-existing conditions.

5. Non-exemption Provision

Lastly, the bill clarifies that association health plans are not exempt from certain federal requirements, ensuring they still comply with applicable health regulations established by ERISA and the Public Health Service Act.

Relevant Companies

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