The DC Council is considering legislation that would prohibit fully-insured “large group” association health plans (AHPs) from operating in the nation’s capital.
The bill, titled the “Health Insurance Marketplace Improvement Act of 2018,” is largely in response to new rules from the Department of Labor that expand association health plans and short-term health plans as options for small business owners and independent contractors. DC Council Chairman Phil Mendelson introduced the bill last month to require any health coverage offered through an AHP to be governed by the District’s “small group” market rules.
To help justify the need for the legislation, Mendelson and other supporters have cited a DC Health Benefit Exchange Authority study indicating that 90 percent of the District’s small group market will leave the DC Health Link, the city’s health insurance marketplace created by the Affordable Care Act, in favor of an AHP.
The Coalition to Protect and Promote AHPs, of which ASAE is a steering committee member, testified on the proposed bill at a DC Health Committee hearing Nov. 7. The coalition’s representative, attorney Chris Condeluci, argued that the District’s ability to regulate the plan structure or administration of AHPs operating in the city is preempted by the federal Employee Retirement Income Security Act (ERISA).
By seeking to prevent District-based organizations from offering a fully-insured “large group” plan, DC Councilmembers are “signaling that they support taking away choice, and eliminating the ability for small employers and independent contractors to access comprehensive health coverage at a lower cost than the plans currently available in the ‘small group’ and ‘individual’ markets,” the coalition said in its written testimony.
The coalition offered to work with states and the District to develop regulations that protect consumers and keep fraudulent actors out of the marketplace, while at the same time affording organizations flexibility to offer a “large group” employer plan.