White House Meets Stakeholders on Small Business Health Rule

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By Madison Alder

Four groups have met with the Trump administration to lay out what they want in the Labor Department’s rule to expand health insurance for small businesses as it nears the rule-making finish line.

The National Restaurant Association, the Coalition Against Insurance Fraud, human resources firm TriNet Group Inc., and a group of state-based health insurance marketplaces have met with administration officials to discuss the final regulation. The groups’ interests indicate that state oversight may be a key topic of concern.

The rule, which has been under review at the White House’s Office of Information and Regulatory Affairs for a little more than a month, would expand access to a small business health option known as association health plans by loosening the definition of “employer” to include more people. The rule would allow small businesses and self-employed individuals to band together in associations by geography or industry and create a group health insurance plan.

Supporters of the rule argue the plans would allow small businesses to access affordable health care in the same way large businesses do and businesses could create plans tailored to the needs of workers. But skeptics say groups would be able to create cheaper plans with minimal coverage and lure people away from the individual marketplace of the Affordable Care Act, leaving behind an older, sicker population.

Final review by OIRA can take anywhere from weeks to months, or lead to a rejection that gets sent back to the DOL’s Employee Benefits Security Administration. The administration has fast-tracked this rulemaking as part of an attempt to provide Americans with relief from the ACA.

The Last Word

The meetings, which are part of the standard rule-making process and took place in the last few weeks, were posted to OIRA’s website June 8. A senior Office Management of Budget official told Bloomberg Law the meetings are posted “on a rolling basis.”

Officials who meet with groups can’t share information about the final rule, but advocates say it’s important to have their voices heard in each step of the rule-making.

“I don’t know if anything we said will make the regulation different but it’s important to educate the people who are involved in that process,” Mila Kofman, executive director of the DC Health Benefit Exchange Authority, told Bloomberg Law.

Kofman was part of a group of state-based health insurance marketplace directors who met with administration officials June 1 to discuss states’ ability to regulate association health plans, which isn’t clearly defined in the public version of the rule.

States have been the most successful in regulating and investigating plans accused of wrongdoing, Kofman said. “We wanted to be clear that states can only continue to be successful if we’re not preempted.”

‘Cherry-Picking’ Concerns

The state-based marketplace directors also were concerned about plans “cherry-picking” their insured populations by targeting healthy groups of workers with low-coverage plans or excluding certain benefits to attract healthy people. They also raised the prospect of potential fraud risks associated with similar plans in the past. The group directed the administration officials to studies showing a history of fraud in small business plans.

The Coalition Against Insurance Fraud had similar concerns.

“We urged them if they were going to make any changes to make certain that any change could prevent fraud for consumers,” Matthew Smith, director of governmental affairs for the Coalition Against Insurance Fraud, told Bloomberg Law.

The organization focused on the history of fraud similar health insurance arrangements had in the early 2000s and suggested solutions including clarifying state oversight; coordinating state and federal enforcement; and mandating an annual report on anti-fraud efforts from the Labor Department.

TriNet didn’t respond to an inquiry about the subject of its meeting. In its comment letter, however, the human resources group told the Labor Department it was concerned the states’ ability to regulate the plans would make it difficult for associations to form across several states and comply with local laws. TriNet suggested DOL change the rule’s language to treat association plans as single-employer plans.

The National Restaurant Association wouldn’t comment but pointed Bloomberg Law to its comment letter for more information. In its letter, the association asked the Labor Department to grandfather existing plans—like its own—to avoid changing the coverage under the rule’s non-discrimination provisions, and suggests it solve the issue of state-to-state uniformity by requiring an association plan to comply with the rules for the state in which it’s located.

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