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The Administration Proposes Targeted Relief for Rising Health Insurance Costs
Health care reform continues to be a primary concern for the administration and Congress; however, comprehensive “repeal and replace” efforts have lagged in momentum lately, losing support in favor of more attainable legislative goals. The administration has since turned to smaller, targeted fixes to provide relief to Americans lacking affordable health insurance options.
Last year, the White House released an executive order directing the U.S. Departments of Labor, Health and Human Services, and Treasury to consider ways to promote increased choice and competition in the health insurance markets. One way the administration aims to accomplish this is by allowing more small businesses and self-employed individuals to band together to obtain health insurance through an Association Health Plan, or AHP .
To implement this administrative priority, on Jan. 6, 2018, the Department of Labor (DOL) issued a “Notice of Proposed Rulemaking” recommending changes to increase access to AHPs. This action has been of significant interest to self-employed individuals, small business owners, and those advocating on behalf of these groups, including the National Association of REALTORS® (NAR).
For well over a decade, NAR has advocated for reforms to the health insurance markets to provide better coverage to the self-employed and small employers that support the real estate industry, including backing AHPs. The proposed rule could provide a framework that may allow the self-employed and small employers to purchase health insurance in the large group insurance market, instead of the more volatile and costly individual and small group markets where real estate professionals traditionally purchase insurance. As more insurance companies drop out of the Affordable Care Act (ACA) marketplaces, driving up costs, the promise of additional insurance options through AHPs are greatly welcomed by the real estate industry.
The proposed rule would broaden the definition of “employer” to include so-called “working owners” (i.e., sole proprietors, independent contractors or the self-employed) under the Employee Retirement Income Security Act of 1974 (ERISA), which is the federal law governing employer-sponsored group health plans. The proposed rule would also expand DOL’s “commonality of interest” test, which allows employers to band together in an AHP if they are in either the same trade or line of business, or if they have a principal place of business within the same region of a state or the same metropolitan area.
With these proposed changes, small businesses and self-employed individuals that join an AHP would enjoy insurance options that are not subject to certain ACA small group and individual market rules, such as specific benefit requirements, which may limit choices and boost premiums. While still subject to state benefit mandates, most AHPs could offer small employers and self-employed individuals more flexibility in health plan design and pool participants on a larger scale that may result in overall lower insurance costs.
NAR supports the rights of individuals to be able to choose their preferred health insurance plan from an array of options that offer a variety of covered services and policy costs. NAR submitted a comment in strong support of DOL’s efforts to increase such options, and recommended changes to eligibility requirements to maximize participation by self-employed real estate professionals.
DOL will be reviewing the hundreds of comments submitted and issue a final rule reflecting that feedback, likely later this year. That rule could then be used by insurers for plan design; however, it is anticipated that the final rule may be subject to legal challenges that could delay implementation. NAR will be closely following this progress and the potential benefits for real estate professionals across the country. For more information, stay tuned to www.nar.realtor/health-care-reform.
Christie DeSanctis is NAR’s government affairs policy representative on business issues. This column is brought to you by the NAR Real Estate Services group.