DOL Unit Prepares Multi-Employer Health Purchasing Proposal

President Donald Trump and his administration say they want to help small employers hold down benefits costs by joining together more easily to bargain for better and cheaper coverage, or to participate in self-insured plans.

When Trump issued a health benefits executive order in October, the order included a request for DOL to support the creation of interstate association health plans by revising the rules for deciding what kinds of organizations qualify as employers, under ERISA Section 3(5), for health coverage purchasing purposes.

Advocates of interstate association health plans argue that they will give employers the same flexibility, and freedom from state-imposed, cost-increasing red tape, that large employers now enjoy.

Critics, including many state insurance regulators, say expanded use of interstate association health plans could wreck state efforts to set quality standards and other standards for small-group coverage.

The critics also note that running a multi-employer health plan is difficult, even when all of the employers are in the same state, and that antiselection problems have destroyed many single-state associate health plan programs.

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