President Donald Trump prepares to sign the executive order that include the association health plan provision, in October. (Photo: White House)

The Employee Benefits Security Administration is getting ready to release a draft regulation that could help employers team up when buying health coverage.

EBSA, an arm of the U.S. Department of Labor, began putting the draft regulations through a review process at the federal Office of Management and Budget on Tuesday.

(Related: 3 Trump Health Benefits Executive Order Facts, for Agents)

The only information about the draft right now comes from a catalog entry in the OMB regulation tracking system. The catalog entry does not include a link to the text of the draft, or even a general summary of the draft.

The title of the draft regulation in the catalog entry is “Definition of an ‘Employer’ Under Section 3(5) of ERISA — Association Health Plans.”

ERISA, or the Employee Retirement Income Security Act of 1974, is the federal law that creates the framework for most U.S. employee benefits plans.

Section 3(5) deals with how regulators define “an employer” for ERISA purposes.

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.

—Read Failed Health Plan Had $2,400 in Unpaid Claims Per Enrollee  on ThinkAdvisor.


— Connect with ThinkAdvisor Life/Health on
Facebook and Twitter.