According to commenters, certain populations with specific needs, such as those with disabilities, could be disproportionately affected if their coverage does not include a robust level of benefits. Some of these commenters suggested that to mitigate these effects, the DOL should require AHPs to provide EHBs or some other minimum level of benefits, or require them to provide “minimum value” within the meaning of Code Sec. 36B(c)(2)(C)(ii) and Reg. §1.36B-6.
Proponents of the rule, however, while acknowledging concerns that AHPs may provide inadequate benefits, did not believe that “legitimate” membership organizations would risk their goodwill and reputation by offering such health plans. Instead, they argued that economies of scale would enable AHPs to offer more comprehensive coverage to their members than they would be able to purchase on their own. One commenter noted that even though self-insured plans and large group market policies are not required to provide EHBs, most do, in fact, provide comprehensive coverage.
The DOL decided not to make the provision of EHBs in an AHP a condition for a group or association to qualify as bona fide. Such a mandate would run contrary to the goal of leveling the playing field between small employers in AHPs, on the one hand, and large employers, on the other, who generally are not subject to the EHB requirements, according to the DOL. Moreover, such a mandate could reduce AHPs’ flexibility to tailor coverage to the particular needs of the members of the group or association offering the benefits, and thereby reduce access to AHPs by making them less attractive options. Thus, the DOL also decided that the final rule would not require the provision of “minimum value” coverage as a condition for a group or association to qualify as bona fide.
The ability to design AHP benefit packages and set cost-sharing requirements without the burden of certain federal restrictions is critical to enabling AHPs to provide an additional, more affordable coverage option to small businesses and working owners who may otherwise have been unable or unwilling to obtain higher-priced coverage, the DOL said. The department also believes that concerns about adverse selection as result of AHPs not providing comprehensive coverage are “overstated.” The DOL sided with those commenters who asserted that AHPs are not likely to offer relatively low levels and scope of benefits, which could jeopardize their relationship with their members.
Other protections that would apply. The DOL also said that other federal and state coverage requirements mayapply to AHPs, say for example, that AHPs must provide coverage for certain recommended preventive services without the imposition of cost-sharing. These services include:
Evidence-based items or services that have in effect a rating of A or B in the current recommendations of the United States Preventive Services Task Force (Task Force) with respect to the individual involved;
Immunizations for routine use in children, adolescents, and adults that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention (Advisory Committee) with respect to the individual involved. A recommendation of the Advisory Committee is considered to be “in effect” after it has been adopted by the Director of the Centers for Disease Control and Prevention. A recommendation is considered to be for routine use if it appears on the Immunization Schedules of the Centers for Disease Control and Prevention;
With respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA); and
With respect to women, evidence-informed preventive care and screening provided for in comprehensive guidelines supported by HRSA (not otherwise addressed by the recommendations of the Task Force).
The DOL also pointed out that Title VII, as amended by the Pregnancy Discrimination Act, generally provides that pregnancy-related expenses for employees and their spouses must be reimbursed in the same manner as those incurred for other medical conditions.
FAQs. In conjunction with its release of the final rule, the DOL has posted a series of “Frequently Asked Questions” about the final rule. Among other things, the FAQs state that AHPs:
will not be able to charge different premiums to employees based on their health status;
will not be able to charge employers different rates based on the health status of their employees;
may not charge higher premiums or deny coverage to people because of pre-existing conditions, or cancel coverage because an employee becomes ill; and
cannot cherry-pick or discriminate based on health or prior conditions.
Applicability. The new rule does not affect previously existing AHPs permitted under prior guidance. Such plans can continue to operate as before, or elect to follow the new requirements if they want to expand within a geographic area, regardless of industry, or to cover the self-employed. New plans can also form and elect to follow either the old guidance or the new rules.