Association Health Plans Act
S. 1847, the Association Health Plans Act, would revise ERISA to explicitly treat certain groups or associations of employers as employers for the purpose of offering and regulating employee welfare benefit plans (i.e., association health plans, or AHPs). It sets a detailed set of eligibility criteria that a group or association must meet to be considered an employer, including size, duration, purpose, governance, and non-discrimination requirements. It also clarifies how self-employed individuals can participate and be counted within these groups, and it provides rules for pooling and aggregating all members’ employees into a single MEWA (multiple employer welfare arrangement) for regulatory purposes. The bill then adds a new section on premium setting for AHPs, allowing base rates based on actuarially sound, modified community rating with employer-specific adjustments, and it lays out protections against health-status-based discrimination and pre-existing-condition exclusions. Finally, it preserves existing ERISA and PHSA protections by stating that nothing in the act exempts these plans from current law. In short, the bill aims to expand and standardize how association health plans are formed and priced, broaden who can participate (including self-employed individuals), and tighten governance and anti-discrimination protections, while ensuring AHPs remain subject to existing ERISA and PHSA rules.
Key Points
- 1Eligibility criteria to treat a group or association of employers as an “employer” under ERISA, enabling the creation and regulation of an AHP, including requirements on plan existence, membership, governance, and non-discrimination, plus rules about self-employed individuals being treated as both employers and plan participants.
- 2Self-employed individuals can participate in AHPs and be treated as both employer members and employees, with board oversight to determine continued eligibility and a mechanism to remove or reinstate coverage based on ongoing eligibility.
- 3All employees of all employer members (including self-employed individuals) are counted and treated as participants in a single MEWA, with aggregation for regulatory purposes under the plan.
- 4New rules for premium rates: AHPs may use base premium rates based on actuarially sound, modified community rating, with per-employer contribution rates adjusted by each employer’s risk profile; if an AHP is composed only of self-employed individuals, they are pooled as a single risk pool with uniform premiums.
- 5Discrimination and pre-existing condition protections: AHPs may not discriminate in eligibility or premiums based on health status, and they cannot deny coverage based on pre-existing conditions, aligning with existing ERISA/PHSA protections.