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Executive Order Supports Association Health Plans for Small Business

Last week, President Donald Trump signed an executive order that would allow more small businesses to buy health insurance for their workers through federally sanctioned association health plans (AHPs).

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Last week, President Donald Trump signed an executive order that would allow more small businesses to buy health insurance for their workers through federally sanctioned association health plans (AHPs).

On Oct. 12, Trump signed an executive order directing the Labor, Treasury and Health and Human Services departments to rewrite federal regulations to allow AHPs to be more widely used and to take other steps to help provide more affordable health coverage access for businesses and individuals.

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The order includes the following text:

“Large employers often are able to obtain better terms on health insurance for their employees than small employers because of their larger pools of insurable individuals across which they can spread risk and administrative costs. Expanding access to AHPs can help small businesses overcome this competitive disadvantage by allowing them to group together to self-insure or purchase large group health insurance. Expanding access to AHPs will also allow more small businesses to avoid many of the PPACA’s (Patient Protection and Affordable Care Act) costly requirements. Expanding access to AHPs would provide more affordable health insurance options to many Americans, including hourly wage earners, farmers, and the employees of small businesses and entrepreneurs that fuel economic growth.”

“The National Retail Federation is a longstanding supporter of association health plans,” NRF vice president for health care policy Neil Trautwein said. “We welcome the administration’s move because associations can bring necessary competition to underserved insurance markets. We look forward to working with state retail associations to determine how best to move forward on AHPs.”

AHPs allow small employers to band together through trade or professional organizations in order to purchase coverage at rates normally available only to large companies. They are allowed at the state level in some states, but cannot currently operate across state lines. That restriction would be lifted under the Trump order.

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The order states that within 120 days, the secretaries of the Treasury, Labor, and Health and Human Services shall consider proposing regulations to make the actions occur.

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