President Trump has signed an executive order intended to allow individuals and small businesses to buy health insurance across state lines and bolster access to association health plans (AHPs). The order also directs the Departments of Treasury, Labor, and Health and Human Services to consider rules that would expand coverage through short-term limited duration insurance (STLDI) and consider regulatory changes to expand Health Reimbursement Arrangements (HRAs).
According to the Council of Insurance Agents & Brokers, the executive order is a controversial move that critics say will undermine competition in some markets and drive up costs for consumers, while supporters argue that it unleashes the purchasing power for individuals and small groups.
The order directs the Secretary of Labor to consider expanding access to AHPs, which could potentially allow American employers to form groups across State lines.
- A broader interpretation of the Employee Retirement Income Security Act could potentially allow employers in the same line of business anywhere in the country to join together to offer healthcare coverage to their employees.
- It could potentially allow employers to form AHPs through existing organizations, or create new ones for the express purpose of offering group insurance.
The order also directs the Departments of the Treasury, Labor, and Health and Human Services to consider expanding coverage through low cost STLDI.
Furthermore, the order directs the Departments of the Treasury, Labor, and Health and Human Services to consider changes to HRAs so employers can make better use of them for their employees.
It will probably take months for the agencies to develop proposed regulations, which will be followed by a comment period before any regulations can be finalized. For now, the executive order doesn’t change anything, but it likely means some significant changes are coming later in the year.