Association Health Plans Act
This bill, titled the Association Health Plans Act, would expand who can sponsor and participate in association health plans (AHPs) under ERISA. It creates a framework for a group or association of employers to be treated as the employer for purposes of establishing and maintaining an employee welfare benefit plan that is a group health plan. Key features include allowing self-employed individuals to participate as members and be treated as both employers and participants, expanding eligibility to include groups that meet specific criteria (e.g., at least 51 employees total, at least 2 years in existence), and enabling these groups to pool and manage health plan risks across their members. The bill would set rules for how premiums are set (base rates plus risk-based adjustments) and require protections against discrimination and pre-existing conditions. It also clarifies that establishing such an AHP does not by itself create an employer or joint-employer relationship under federal or state law, and that the plans remain subject to ERISA and related federal health protections.
Key Points
- 1Expanded definition of eligible groups: A group or association of employers can be treated as an employer for ERISA purposes if it meets a defined set of criteria, including having an employee welfare benefit plan that is a group health plan, at least 51 covered employees, at least two years of existence, good-faith formation for purposes other than providing medical care, and a formal governance structure.
- 2Self-employed inclusion: Self-employed individuals can be treated as both potential employer members and plan participants, with governance provisions to determine who qualifies as self-employed and how eligibility is monitored.
- 3Aggregate counting and pool structure: All employees (including self-employed members) of all employer members are treated as participants in a single multiemployer welfare arrangement for purposes of plan administration and regulation, enabling cross-member pooling and joint management of the plan.
- 4Premium rate rules: Plans established by these groups can use base premium rates based on actuarially sound, modified community rating, pooling all plan participant claims. Individual employer members can be charged rates adjusted for each member’s risk profile. If the group is composed solely of self-employed individuals, all members are treated as a single risk pool with uniform premiums.
- 5Protections and limitations: Plans must avoid health-status discrimination in eligibility, not charge higher premiums based on health status, and must not deny coverage for pre-existing conditions, aligning with existing federal protections. The act explicitly states that creating an AHP plan does not in itself create an employer or joint-employer relationship under federal or state law.
- 6Legal framework and applicability: The AHP would be governed by ERISA Part 7 and related federal health protections, and the bill specifies that nothing in the act exempts these plans from the broader requirements of ERISA and the Public Health Service Act (PHSA) as incorporated by reference.