State Governance of AHPs

On Aug. 2, 2018, Insurance Commissioner Altman submitted a memo to the DOL in response to the final association health plan (AHP) regulations published by the DOL. In the memo, the Commissioner lays out the Insurance Department’s opposition to the regulations and intention to enforce the state’s existing restrictions as related to associations and AHPs. This position is in agreement with Pennsylvania Attorney General Shapiro, who has joined 11 other attorneys general in a lawsuit opposing the regulations.

Since the final regulations provide for state regulation of associations, it’s important to understand Pennsylvania’s current law. Pennsylvania:

  • Prohibits a self-insured AHP, unless the association is licensed as an insurer meeting all financial and licensing requirements.
  • Permits fully insured AHPs as long as the association has been in existence for at least two years and its primary purpose is other than the purchase of insurance.
  • Prohibits a self-employed individual with no employees from joining an AHP as an employer. Such person would only be eligible to purchase an individual policy.
  • Prohibits an insurer from issuing a large group policy to an association which consists of small employers with fewer than 50 employees. A small employer who joins an AHP would still be rated as a small employer subject to the small employer mandated benefits.

The issue of AHPs is complex and constantly changing. We’ll continue to report any developments in Compliance Corner. If you have any questions as to how these rules may impact your health plan opportunities, please contact your advisor.

Commissioner Altman Memo to DOL »
Insurance Department Press Release »