Tuesday, the Department of Labor announced a new rule that experts in the housing industry say will make health care more affordable for small businesses.
In accordance with an executive order issued by President Donald Trump last year to promote healthcare choice and competition across the U.S., the Department of Labor announced a new rule that will change the definition of employer to include working owners for Association Health Plans.
The National Association of Realtors explained this will allow real estate professionals and other self-employed individuals to participate in association health plans. The ruling also makes AHPs available to independent contractors who are offered coverage through a spouse, the current source of coverage for roughly 40% of Realtors.
“After years of advocating for independent contractors’ right to pursue coverage through association health plans, NAR welcomes today’s Department of Labor ruling,” NAR President Elizabeth Mendenhall said.
“America’s self-employed, including real estate professionals, may now have the opportunity to purchase health insurance through a group health plan, taking advantage of economies of scale that may improve access to care while also receiving critical flexibility to choose between their spouse’s plan and an AHP,” Mendenhall said.
The Department of Labor explained this reform allows small employers, many of whom are facing much higher premiums and fewer coverage options under Obamacare, a greater ability to join together and gain many of the regulatory advantages enjoyed by large employers.
In speaking about the new rule Tuesday morning, Trump told a room of small business owners they could simply shake hands, form an association with a couple other business owners in the room, and qualify for AHP under the new rule.
“President Donald J. Trump is expanding affordable health coverage options for America’s small businesses and their employees,” said U.S. Secretary of Labor Alexander Acosta. “Many of our laws, particularly Obamacare, make healthcare coverage more expensive for small businesses than large companies.”
“AHPs are about more choice, more access, and more coverage,” Acosta said. “The President's decision helps working Americans – and their families – purchase quality, affordable health coverage.”
One expert explained his hopes that legal challenges will not delay the implementation of the new rule.
“NAR applauds the DOL for the latest rulemaking and hopes that legal and other challenges do not extensively delay the rule’s implementation and future enrollment periods,” NAR CEO Bob Goldberg said. “NAR has already begun work with health insurance experts and providers on potential next steps to help secure high-quality health insurance for all of our members and their families.”
And NAR isn’t the only housing organization applauding the new rule. The National Association of Home Builders also commended the Trump administration for its work on the new rule, saying it will provide better health coverage for workers.
“The new rule released today implements the executive order on AHPs signed by President Trump last fall,” NAHB Chairman Randy Noel said. “It will allow small businesses access to better and more affordable health care plans, place these firms on an equal footing with large employers and unions when it comes to negotiating lower costs for coverage and level the playing field for smaller companies that want to help their workers and their families with their health care needs.”
“NAHB has been a long-time proponent of AHPs, which empower small businesses to pool together to purchase health insurance plans for their employees,” Noel said. “Allowing sole proprietors and independent contractors to participate in the program will expand access to affordable health coverage, particularly among small employers and self-employed individuals.”
The rule includes several safeguards. Consumer protections and healthcare anti-discrimination protections that apply to large businesses will also apply to AHPs organized under this rule. As it has for large company plans since 1974, the department's Employee Benefits Security Administration will monitor these new plans to ensure compliance with the law and protect consumers. Additionally, states will continue to share enforcement authority with the federal government.
The new rule does not affect previously existing AHPs, which were allowed under prior guidance. Such plans can continue to operate as before, or elect to follow the new requirements if they want to expand within a geographic area, regardless of industry, or to cover the self-employed. New plans can also form and elect to follow either the old guidance or the new rules.