In their comment letter, the AGs told the agency that its proposed rule changes will “increase the risk of fraud and harm to consumers.” It will also “undermine the current small group and individual health insurance markets.”
Furthermore, they stated that its proposals are inconsistent with the text of the Employee Retirement Income Security Act (ERISA) and ACA.
The coalition of AGs noted that “Association Health Plans have a long and notorious history of fraud, mismanagement and deception.”
Moreover, they emphasized that the agency’s proposal will reverse many of the critical health care consumer protections under ERISA and ACA. According to them, the proposed rule will make three substantial changes:
- Eradicate longstanding ERISA definitions such that associations may form solely for the purpose of purchasing or providing health plans if the employers are in the same industry or the same geographic region;
- Deem self-employed individuals to be both employers and employees such that they can participate in employer associations; and
- Allow most associations to be single, large employers such that they may evade many ACA requirements (now imposed on small group and individual plans).
The AGs encouraged the Department of Labor to withdraw its proposed rule. They noted that the agency did not provide evidence-based rationales for reversing its longstanding position. Therefore, its proposal is “arbitrary and capricious.”
