President Trump signed an executive order this morning instructing federal agencies to rewrite federal rules for association health plans (AHPs), which allow small businesses of a similar type to band together through an association to purchase coverage.

Under the executive order, membership groups could sponsor insurance plans across state lines and would be able to avoid some requirements of the Affordable Care Act, including requirements that they cover certain benefits.

The administration is also expanding the availability of short-term insurance plans, allowing insurers to sell short-term insurance that would last for up to a year, up from three months under Obama-era restrictions. These stop-gap policies may not be required to cover pre-existing conditions, mental health services and other benefits but could serve as a bridge for people who are between jobs or young adults no longer eligible to be on their parents’ health plans. Critics say such plans would attract younger, healthier people, causing prices to skyrocket for those older or sicker individuals in the Obamacare markets.

Sen. Rand Paul (R-KY), who joined Trump at the White House today, has been pushing for new rules that would expand association health plans, and called Thursday’s executive order “the biggest free market reform of health care in a generation.”

Importantly, administration officials made clear that the executive order does not make changes itself, but directs agencies to issue new regulations. Those new rules will be subject to a notice and comment period that could take months, officials told reporters.

Among the details missing in Trump’s executive order is who will qualify as an association. According to POLITICO, the Labor Department (DOL) is working on a reinterpretation of the workplace rule that would broaden the kinds of groups that can qualify as an association and exempt themselves from ACA regulations.

“ASAE is studying the executive order closely and we will be looking for more details about how these new rules would work,” said ASAE President and CEO John Graham. “ASAE has long believed that association health plans could expand health care choices for small businesses and franchise owners if federally regulated. But how the administration defines an association and how DOL and other agencies rewrite existing rules will be important questions to answer.”

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