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?”