The U.S. Department of Labor proposed allowing health insurance to be sold across state lines through small business or association health plans Thursday.
Association health plans allow groups such as employers, community organizations, churches or professional associations to purchase health plans together. The plans are not required to comply with certain ACA regulations, making them a cheaper, albeit often less comprehensive, option.
Here are three things to know about the proposal.
1. The department's new rule comes after President Donald Trump signed an executive order Oct. 12 to ease restrictions on association health plans. The order directed the Department of Labor to change their current rules and allow small businesses in the same line of work or the same trade organization to band together and purchase insurance plans.
2. The Jan. 4 proposal concerns only employer-sponsored health insurance. It would allow employers to join together as a single entity to purchase health insurance in the large group market. Notably, the proposal would allow the interstate sale of health insurance.
3. While President Trump's executive order aims to spur competition and lower premiums for consumers, state insurance regulators and ACA advocates warn the less regulated plans may offer inadequate coverage, according to Politico. Small businesses and trade groups, on the other hand, have argued deregulation will give them more purchasing power.