Maine industry leaders embrace new health insurance rules that lower costs – and benefits

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Industry leaders in Maine say they welcome new rules issued Tuesday by the Trump administration that will allow national trade organizations, local chambers of commerce and other business groups to offer their own health insurance plans to their members.

But some health care advocates criticized the new rules, saying they could further destabilize the state’s Affordable Care Act market by introducing a cheaper alternative that does not have to meet the same standards for quality health insurance coverage.

On Tuesday, the U.S. Department of Labor issued a 200-page document that lays out rule changes to loosen the eligibility requirements for a type of large group health insurance plans known as association health plans, making it easier for business organizations to offer them.

Association health plans allow small businesses to band together to obtain more affordable health insurance coverage as a group. They are an old concept, and some statewide industry groups in Maine have offered them for decades.

However, representatives of various trade organizations in the state said the rule change will make association health plans more affordable and accessible. Changes include allowing businesses that share a common geographic area to band together. Previously, only businesses in the same industry were allowed to join up for the purposes of obtaining group coverage. The rule change will open the door for local chambers of commerce to offer health insurance, for example.

Another change is that regional and national trade organizations will be allowed to offer association health plans to their members across multiple states, which was not allowed previously.

“For Realtors, who are independent contractors, and other self-employed individuals, this may result in expanded access to health insurance options through their trade associations,” said Kim Gleason, president of the Maine Association of Realtors and broker/owner of McAllister Real Estate in Hallowell. “There is still a long legal and regulatory road to travel before association health plan solutions could become viable for Realtors, but this ruling was a necessary step for our national trade association to continue working toward high-quality, affordable health insurance for our Realtor members and their families, and we are pleased with this ruling.”

Gleason said surveys of Maine’s real estate community have found that 38 percent of Realtors have “expensive individual policy coverage,” and 13 percent have no health insurance at all. Those two groups would be the most likely to benefit from the rule change, she said.

Steve Hewins, president and CEO of the Maine Innkeepers Association and Maine Restaurant Association, agreed that increased access to group health insurance is a positive development for his industry.

“We are actively looking at association health care plans to potentially offer to our members,” he said. “Our industry is largely made up of small businesses that either do not qualify for, or cannot afford, small-group policies that were once a good option.”

Hewins said that by combining purchasing power through trade organizations, the hope is that it would help restaurants and hotels retain their employees by allowing them to offer affordable health insurance coverage.

“This is an important factor in an industry struggling to find enough workers,” he said. “So often, larger companies can provide coverage that is beyond the means of small businesses in this state.”

The changes announced Tuesday will allow a greater number of business organizations in Maine to offer health insurance plans that are exempt from certain ACA requirements. They still cannot reject members based on preexisting health conditions, but they could opt to forgo coverage for certain conditions such as pregnancy or mental illness.

Groups that support the ACA have expressed concern that association health plans do not have to meet the same quality standards, which could leave some policyholders without adequate coverage for their health problems. Maine has its own state-mandated requirements for health insurance, and state Superintendent of Insurance Eric Cioppa said the Bureau of Insurance would need to review details of the rule changes before it can determine whether Maine’s rules could be superseded.

Because association health plans are likely to be cheaper than ACA plans, they could lure away younger, healthier residents, causing ACA insurance premiums to increase for everyone else, the critics said.

“Association health plans fail to provide real coverage because they can refuse to cover critical consumer protections like prescription drug coverage, mental health care and maternity care, and studies show that these types of plans have a long history of fraud and unpaid claims,” said Rebecca London of Protect Our Care, a pro-ACA policy group. “These garbage health plans are just the latest Trump administration attempt to undermine and sabotage our health insurance – sticking Americans with higher costs and chipping away protections for millions and millions of people with preexisting conditions. The Republican war on health care continues to mean you pay more, you get less.”

Steven Gerlach, a tax attorney at Bernstein Shur in Portland who specializes in employee benefits, said the rule change could offer significant relief to small business owners in Maine.

“What I’m seeing so far is a lot of activity, a lot of interest that is not politically motivated, but motivated by good business sense,” Gerlach said.

Curtis Picard, president and CEO of the Retail Association of Maine, said his organization is “absolutely” interested in offering group health insurance to small retailers in the state, either on its own or through a regional alliance or national trade organization.

“This is something we’ve been advocating for a long time, so it’s great to see some progress being made,” he said.

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