GOP Senators Move to Protect DOL’s AHP Rule

With the Trump administration’s Association Health Plan rule stymied by a federal judge’s ruling, a large group of Republican senators has introduced legislation to fill that gap.

Sens. Chuck Grassley (R-IA) and Joni Ernst (R-IA) have joined Sen. Mike Enzi (R-WY) and a group of colleagues in introducing legislation to “prevent thousands of people from losing their health care coverage,” according to a press release. The legislation would “ensure the new pathway remains available for small businesses to offer Association Health Plans under the Department of Labor’s final rule,” according to the bill’s sponsors.

In March, U.S. District Judge John Bates struck down the Labor Department’s AHP rule, noting that, ““the Final Rule exceeds the statutory authority delegated by Congress in ERISA,” and that “the Final Rule’s provisions defining ‘employer’ to include associations of disparate employers and expanding membership in these associations to include working owners without employees are unlawful and must be set aside.”

The AHP rule, finalized last June, claimed to make insurance more affordable for small businesses, allowing plans to be customizable to tailor benefit design to small businesses’ needs, as well as providing a way to reduce administrative costs and strengthen negotiating power with providers from larger risk pools and greater economies of scale. It did so by interpreting ERISA’s definition of “employer” to let small businesses and the self-employed band together to buy employee health care plans from the large-group insurance market.

A month later, the District of Columbia and 11 states (California, Delaware, Kentucky, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Virginia and Washington) filed suit challenging the finalized AHP rule, claiming that it violated the “text, structure and purpose” of the ACA.

The bill’s sponsors note that, according to the Congressional Budget Office, about 4 million people are expected to enroll in an AHP by 2023, including 400,000 who would otherwise be uninsured.

The legislation was cosponsored by Sens. John Barrasso (R-WY), John Cornyn (R-TX), Johnny Isakson (R-GA), Mike Braun (R-IN), Roy Blunt (R-MO), Shelley Moore Capito (R-WV), Jim Inhofe (R-OK), Martha McSally (R-AZ), John Thune (R-SD), Ben Sasse (R-NE), Mitt Romney (R-UT), Cindy Hyde-Smith (R-MS), Kevin Cramer (R-ND), Tim Scott (R-SC), David Perdue (R-GA), Roger Wicker (R-MS), Lisa Murkowski (R-AK) and Steve Daines (R-MT).