Fulfilling an executive order signed by President Trump last fall, the Labor Department on Tuesday released new rules expanding the use of association health plans, which allow self-employed individuals and small businesses to join together to purchase health care coverage as a group.
Republicans have long promoted association plans, which can be sold across state lines, as a cheaper health care option. The plans typically offer lower premiums compared to plans available on the federal insurance exchanges, but also provide fewer benefits than required under the Affordable Care Act.
Writing in The Washington Post, Sen. Lamar Alexander (R-TN) said the new rules are designed to help small business owners and employees at small firms, and cited self-employed plumbers, farmers and waitresses as illustrative examples.
Some state insurance regulators have warned that the plans have had problems with financial solvency and even fraud in the past, the Associated Press reports. And the widespread use of association plans is expected to have a negative impact on the stability of the federal insurance markets, resulting in higher premiums as younger, healthier customers gravitate toward cheaper insurance options.
The Trump administration is expected to issue new rules for another low-cost health care option, “short term, limited duration” insurance that can provide coverage for up to 364 days, later this year.