Association Health Plans Act

The Association Health Plans Act proposes to amend the Employee Retirement Income Security Act of 1974 (ERISA) to provide a clearer definition for when a group or association of employers can be treated as a single "employer." This redefinition is crucial for the establishment and maintenance of employee welfare benefit plans, specifically group health plans, by these associations. A key provision allows employers from different industries, trades, or professions to form such groups, broadening the potential reach of these plans. To qualify as an "employer" under this amendment, a group or association must meet several specific criteria. These include having been actively in existence for at least two years, maintaining a bona fide purpose other than solely providing medical care, and covering at least 51 employees when all members' employees are aggregated. The association must also have a formal governing board, with at least 75 percent of its members being participating employer members, and cannot be owned or controlled by a health insurance issuer. Significantly, the bill expands eligibility to include self-employed individuals , treating them as both employers and employees within these associations, subject to specific eligibility and monitoring requirements. It outlines rules for premium rates, permitting a modified community rating methodology that considers the pooling of all participant claims, and allows for actuarial adjustments based on an individual employer member's risk profile. However, groups composed solely of self-employed individuals must treat all members as a single risk pool and charge the same premium rate. The legislation also reinforces important consumer protections, explicitly prohibiting discrimination based on health status-related factors for eligibility or premiums. Furthermore, it forbids denying coverage due to pre-existing conditions , aligning with existing health care regulations. The bill clarifies that forming such a plan does not establish an employer or joint employer relationship under other federal or state laws, and these plans remain subject to other relevant ERISA requirements.