Association Health Plans

NAHB has been a long-time proponent of association health plans (AHPs), which empower small businesses to pool together to purchase health insurance plans for their employees.

On Oct. 12, President Trump signed an executive order with NAHB First Vice Chairman Randy Noel standing by his side that would ease restrictions on AHPs. However, while the general intent is clear, the executive order itself does not change existing law. Rather, it directs federal agencies to determine the extent of the regulatory actions they can pursue to meet the President’s health care directives.

Those actions are likely limited compared to legislative steps like NAHB-supported bills passed by the House and pending in the Senate that could make more substantive and permanent changes to the law to expand the ability of businesses to form association health plans.

The executive order directs the Department of Labor to consider proposing regulations or guidance on AHPs within 60 days. As a result, it will be weeks, if not months, before we see a proposal take shape. NAHB will have a better idea of how plans would need to be structured and how state insurance regulators will respond once that becomes available.

Additionally, it is likely that there will be legal challenges mounted that could further slow the process as implementation starts to take shape.

NAHB remains engaged with Congress and the White House on this matter and will continue to monitor the executive order’s implementation and quickly determine what our best opportunities – and those of our affiliated HBAs – may be.

Why It Matters

Smaller employers face significant challenges in negotiating high-quality health care at costs that they and their employees can afford. AHPs would lower costs for employers and workers by putting small businesses on an equal footing with larger employers and unions when it comes to negotiating lower insurance rates. Moreover, with the construction industry facing a severe labor shortage, allowing small residential home building firms to offer competitive health care benefits at affordable rates will help them to attract and retain talented workers.

See the latest on AHPs at NAHBNow.

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Alexis Moch