How ACA Affects AHPs

The ability to pay for healthcare insurance weighs heavily on many American’s minds. Rising insurance premiums and rising medical costs forced some to forego insurance altogether. In March 2010, the Patient Protection and Affordable Care Act (“ACA”) was enacted. Also known as PPACA or Obamacare, the new law brought about the creation of a Marketplace for consumers to find the insurance they needed. Before ACA, though, other options were available, including association health plans (AHPs). Understanding how ACA affects AHPs is important, particularly in light of action taken by the Department of Labor in 2018.

AHPs Prior to ACA

Before ACA was enacted and the Marketplace established, AHPs had a little more freedom. For example, AHPs could choose which state’s insurance laws to follow.

In addition, fewer restrictions on AHPs meant these groups could offer varying degrees of coverage. For example, some preventive services and essential health benefits later required by ACA were not required of AHPs before ACA was enacted. In addition, premiums or eligibility could be based on criteria later prohibited under ACA.

Changes Under ACA

However, post-ACA, AHPs were forced to change in several ways, including:

  • Becoming more geographically restricted.
  • Adding essential health benefits (EHBs) to their plans.
  • Could no longer charge a higher premium based on gender or occupation.

AHPs had become less desirable due to these restrictions and the availability of health insurance on the Marketplace.

DOL Brings About Further Change

The Department of Labor (DOL) published final regulations changing the definition of “employer” for ACA purposes. By removing some of ACA’s restrictions and easing rules for AHPs, the new rules may render AHPs more attractive to consumers.

As Marketplace premiums increase and options decrease, consumers may seek viable options to the plans found on the ACA Marketplace. AHPs may provide the options they need.

As AHPs become more popular, the question may become, “How will AHPs affect ACA?”

Learn More About AHPs and ACA

At Hall Benefits Law, we work extensively with plan administrators and sponsors to develop and maintain employee benefit plans that comply with pertinent laws. Please call 678-439-6236 to discuss your concerns with an experienced attorney. Our website contains more information about our firm, a Contact Form, and free resources for your review. From our home office in Georgia, we assist clients throughout the United States, from New York to California.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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