[House Report 119-409]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-409
======================================================================
ASSOCIATION HEALTH PLANS ACT
_______
December 15, 2025.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Walberg, from the Committee on Education and Workforce, submitted
the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 2528]
The Committee on Education and Workforce, to whom was
referred the bill (H.R. 2528) to amend the Employee Retirement
Income Security Act of 1974 to clarify the treatment of certain
association health plans as employers, and for other purposes,
having considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
The amendment is as follows:
Striking all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Association Health Plans Act''.
SEC. 2. TREATMENT OF GROUP OR ASSOCIATION OF EMPLOYERS.
(a) In General.--Section 3(5) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1002(5)) is amended--
(1) by striking ``The term'' and inserting ``(A) The term'';
and
(2) by adding at the end the following:
``(B) For purposes of subparagraph (A), a group or association of
employers shall be treated as an `employer' solely for purposes of
sponsoring a group health plan, regardless of whether the employers
composing such group or association are in the same industry, trade, or
profession, if such group or association--
``(i)(I) has established and maintains an employee welfare
benefit plan that is a group health plan (as defined in section
733(a)(1));
``(II) provides coverage under such plan to at least 51
employees after all of the employees employed by all of the
employer members of such group or association have been
aggregated and counted together as described in subparagraph
(D);
``(III) has been actively in existence for at least 2 years;
``(IV) has been formed and maintained in good faith for
purposes other than providing medical care (as defined in
section 733(a)(2)) through the purchase of insurance or
otherwise;
``(V) does not condition membership in the group or
association on any health status-related factor (as described
in section 702(a)(1)) relating to any individual;
``(VI) makes coverage under such plan available to all
employer members of such group or association regardless of any
health status-related factor (as described in section
702(a)(1)) relating to such employer members;
``(VII) does not provide coverage under such plan to any
individual other than an employee of an employer member of such
group or association;
``(VIII) has established a governing board with by-laws or
other similar indications of formality to manage and operate
such plan in both form and substance, of which at least 75
percent of the board members shall be made up of employer
members of such group or association participating in the plan
that are duly elected by each participating employer member
casting 1 vote during a scheduled election; and
``(IX) is not a health insurance issuer (as defined in
section 733(b)(2)), and is not owned or controlled by such a
health insurance issuer or by a subsidiary or affiliate of such
a health insurance issuer, other than to the extent such a
health insurance issuer may participate in the group or
association as a member;
``(ii) is structured in good faith with any set of criteria
to qualify for such treatment in any advisory opinion issued
prior to the date of enactment of the Association Health Plans
Act; or
``(iii) meets any other set of criteria to qualify for such
treatment that the Secretary by regulation may provide.
``(C)(i) For purposes of subparagraph (B), a self-employed individual
shall be treated as--
``(I) an employer who may become a member of a group or
association of employers;
``(II) an employee who may participate in an employee welfare
benefit plan established and maintained by such group or
association; and
``(III) a participant of such plan subject to the eligibility
determination and monitoring requirements set forth in clause
(iii).
``(ii) For purposes of this subparagraph, the term `self-employed
individual' means an individual who--
``(I) does not have any common law employees;
``(II) has a bona fide ownership right in a trade or
business, regardless of whether such trade or business is
incorporated or unincorporated;
``(III) earns wages (as defined in section 3121(a) of the
Internal Revenue Code of 1986) or self-employment income (as
defined in section 1402(b) of such Code) from such trade or
business; and
``(IV) works at least 10 hours a week or 40 hours per month
providing personal services to such trade or business.
``(iii) The board of a group or association of employers shall--
``(I) initially determine whether an individual meets the
requirements under clause (ii) to be considered to a self-
employed individual for the purposes of being treated as an--
``(aa) employer member of such group or association
(in accordance with clause (i)(I)); and
``(bb) employee who may participate in the employee
welfare benefit plan established and maintained by such
group or association (in accordance with clause
(i)(II));
``(II) through reasonable monitoring procedures, periodically
determine whether the individual continues to meet such
requirements; and
``(III) if the board determines that an individual no longer
meets such requirements, not make such plan coverage available
to such individual (or dependents thereof) for any plan year
following the plan year during which the board makes such
determination. If, subsequent to a determination that an
individual no longer meets such requirements, such individual
furnishes evidence of satisfying such requirements, such
individual (and dependents thereof) shall be eligible to
receive plan coverage.
``(D) For purposes of subparagraph (B), all of the employees
(including self-employed individuals) employed by all of the employer
members (including self-employed individuals) of a group or association
of employers shall be--
``(i) treated as participants in a single plan multiple
employer welfare arrangement; and
``(ii) aggregated and counted together for purposes of any
regulation of an employee welfare benefit plan established and
maintained by such group or association.''.
(b) Determination of Employer or Joint Employer Status.--The
provision of employee welfare benefit plan coverage by a group or
association of employers shall not be construed as evidence for
establishing an employer or joint employer relationship under any
Federal or State law.
SEC. 3. RULES APPLICABLE TO EMPLOYEE WELFARE BENEFIT PLANS ESTABLISHED
AND MAINTAINED BY A GROUP OR ASSOCIATION OF
EMPLOYERS.
(a) In General.--Part 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1181, et seq.) is
amended by adding at the end the following:
``SEC. 736. RULES APPLICABLE TO EMPLOYEE WELFARE BENEFIT PLANS
ESTABLISHED AND MAINTAINED BY A GROUP OR
ASSOCIATION OF EMPLOYERS.
``(a) Premium Rates for a Group or Association of Employers.--
``(1)(A) In the case of an employee welfare benefit plan
established and maintained by a group or association of
employers described in section 3(5)(B), such plan may, to the
extent not prohibited under State law--
``(i) establish base premium rates formed on an
actuarially sound, modified community rating
methodology that considers the pooling of all plan
participant claims; and
``(ii) utilize the specific risk profile of each
employer member of such group or association to
determine contribution rates for each such employer
member's share of a premium by actuarially adjusting
above or below the established base premium rates.
``(B) For purposes of paragraph (1), the term `employer
member' means--
``(i) an employer who is a member of such group or
association of employers and employs at least 1 common
law employee; or
``(ii) a group made up solely of self-employed
individuals, within which all of the self-employed
individual members of such group or association are
aggregated together as a single employer member group,
provided the group includes at least 20 self-employed
individual members.
``(2) In the event a group or association is made up solely
of self-employed individuals (and no employers with at least 1
common law employee are members of such group or association),
the employee welfare benefit plan established by such group or
association shall--
``(A) treat all self-employed individuals who are
members of such group or association as a single risk
pool;
``(B) pool all plan participant claims; and
``(C) charge each plan participant the same premium
rate.
``(b) Discrimination and Pre-Existing Condition Protections.--An
employee welfare benefit plan established and maintained by a group or
association of employers described in section 3(5)(B) shall be
prohibited from--
``(1) establishing any rule for eligibility (including
continued eligibility) of any individual (including an employee
of an employer member or a self-employed individual, or a
dependent of such employee or self-employed individual) to
enroll for benefits under the terms of the plan that
discriminates based on any health status-related factor that
relates to such individual (consistent with the rules under
section 702(a)(1));
``(2) requiring an individual (including an employee of an
employer member or a self-employed individual, or a dependent
of such employee or self-employed individual), as a condition
of enrollment or continued enrollment under the plan, to pay a
premium or contribution that is greater than the premium or
contribution for a similarly situated individual enrolled in
the plan based on any health status-related factor that relates
to such individual (consistent with the rules under section
702(b)(1)); and
``(3) denying coverage under such plan on the basis of a pre-
existing condition (consistent with the rules under section
2704 of the Public Health Service Act).''.
(b) Clerical Amendment.--The table of contents in section 1 of such
Act is amended by inserting after the item relating to section 734 the
following new items:
``Sec. 735. Standardized reporting format.
``Sec. 736. Rules applicable to employee welfare benefit plans
established and maintained by a group or association of employers.''.
SEC. 4. RULE OF CONSTRUCTION.
Nothing in this Act shall be construed to exempt a group health plan
which is an employee welfare benefit plan offered through a group or
association of employers from the requirements of part 7 of subtitle B
of title I of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1181 et. seq.), including the provisions of part A of title
XXVII of the Public Health Service Act as incorporated by reference
into the Employee Retirement Income Security Act of 1974 through
section 715 of such Act.
Purpose
The purpose of H.R. 2528, the Association Health Plans Act,
is to improve access to affordable health coverage options for
workers employed by small businesses and self-employed
individuals.
Committee Action
109TH CONGRESS
First Session--Legislative Action
On February 2, 2005, Rep. Sam Johnson (R-TX) introduced the
Small Business Health Fairness Act (H.R. 525), along with 53
bipartisan original cosponsors. On March 16, 2005, the
Committee on Education and the Workforce ordered H.R. 525,
without amendment, favorably reported to the House of
Representatives by a vote of 25-22. On April 13, 2005, the
Committee filed its committee report, which detailed the
history of the need for the legislation and of prior committee
action.\1\ On July 26, 2015, H.R. 525 passed the full House by
a vote of 263-165.
---------------------------------------------------------------------------
\1\H.R. Rep. No. 109-41 (2005).
---------------------------------------------------------------------------
111TH CONGRESS
First Session--Legislative Action
Between July 15 and 17, 2009, the Committee met to mark up
H.R. 3200, the America's Affordable Health Choices Act of
2009.\2\ During the markup, Rep. Howard P. ``Buck'' McKeon (R-
CA) offered an amendment to create a new ``Title IV--Small
Business Health Fairness'' at the end of Division A of H.R.
3200. The amendment included rules governing association health
plans (AHPs), the treatment of single-employer arrangements,
enforcement provisions, and other provisions related to AHPs.
The amendment was defeated by a vote of 21-27.
---------------------------------------------------------------------------
\2\H.R. 3200 was the House precursor to the law known as the
Affordable Care Act.
---------------------------------------------------------------------------
On November 7, 2009, the House passed H.R. 3962, the
Affordable Health Care for America Act. During the debate, Rep.
John Boehner (R-OH) included the AHP legislative text in the
Republican motion to recommit.\3\
---------------------------------------------------------------------------
\3\H. Amend. 510 to H.R. 3962, 111th Cong. (2009).
---------------------------------------------------------------------------
On March 21, 2010, the House passed the Patient Protection
and Affordable Care Act by a vote of 219-212 to resolve
differences with the Senate. The bill was signed by President
Obama on March 23, 2010.\4\ On March 25, 2010, the House passed
the Health Care and Education Reconciliation Act of 2010 by a
vote of 220-207 to resolve differences with the Senate. This
bill was signed into law by President Obama on March 30,
2010.\5\ Collectively, the two bills are known as the
Affordable Care Act (ACA or Obamacare).\6\ The ACA did not
include AHP legislative text.
---------------------------------------------------------------------------
\4\Patient Protection and Affordable Care Act, Pub. L. No. 111-148
(2010).
\5\Health and Education Reconciliation Act, Pub. L. No. 111-152
(2010).
\6\Patient Protection and Affordable Care Act, Pub. L. No. 111-148
(2010), and Health and Education Reconciliation Act, Pub. L. No. 111-
152 (2010).
---------------------------------------------------------------------------
112TH CONGRESS
First Session--Hearing
On February 9, 2011, the Committee held a hearing entitled
``The Impact of the Health Care Law on the Economy, Employers,
and the Workforce.'' The hearing examined AHPs among other
topics. The witnesses were Dr. Paul Howard, Senior Fellow,
Manhattan Institute, New York, New York; Ms. Gail Johnson,
President and CEO, Rainbow Station, Inc., Glenn Allen,
Virginia; Dr. Paul Van de Water, Senior Fellow, Center on
Budget and Policy Priorities, Washington, D.C.; and Mr. Neil
Trautwein, Vice President and Employee Benefits Policy Counsel,
National Retail Federation, Washington, D.C.
115TH CONGRESS
First Session--Hearings
On February 1, 2017, the Committee held a hearing entitled
``Rescuing Americans from the Failed Health Care Law and
Advancing Patient-Centered Solutions,'' which examined AHPs
among other topics. Witnesses were Mr. Scott Bollenbacher, CPA,
Managing Partner, Bollenbacher and Associates, LLC, Portland,
Indiana; Mr. Joe Eddy, President and Chief Executive Officer,
Eagle Manufacturing Company, Wellsburg, West Virginia; Ms.
Angela Schlaack, St. Joseph, Michigan; and Dr. Tevi Troy, Chief
Executive Officer, American Health Policy Institute,
Washington, D.C.
On March 1, 2017, the Committee held a hearing entitled
``Legislative Proposals to Improve Health Care Coverage and
Provide Lower Costs for Families,'' which examined the Small
Business Health Fairness Act of 2017 (H.R. 1101), among other
proposals. Witnesses were Mr. Jon B. Hurst, President,
Retailers Association of Massachusetts, Boston, Massachusetts;
Ms. Allison R. Klausner, Principal, Government Relations
Leader, Conduent, Secaucus, New Jersey; Ms. Lydia Mitts,
Associate Director of Affordability Initiatives, Families USA,
Washington, D.C.; and Mr. Jay Ritchie, Executive Vice
President, Tokio Marine HHC, Kennesaw, Georgia.
First Session--Legislative Action
On February 16, 2017, Rep. Sam Johnson (R-TX) introduced
the Small Business Health Fairness Act of 2017 (H.R. 1101)
along with Rep. Tim Walberg (R-MI).\7\ On March 8, 2017, the
Committee considered H.R. 1101. Rep. Walberg offered an
amendment in the nature of a substitute (ANS), making technical
changes to the introduced bill. The Committee adopted the
amendment by voice vote. Rep. Susan Davis (D-CA) offered an
amendment to prevent the bill from taking effect under certain
circumstances. The amendment failed by a vote of 17-22. The
Committee favorably reported H.R. 1101, as amended, to the
House of Representatives by a vote of 22 to 17. On March 22,
2017, the House passed H.R. 1101 by a vote of 236-175.
---------------------------------------------------------------------------
\7\H.R. 1101, 115th Cong. (2017).
---------------------------------------------------------------------------
Second Session--Hearing
On March 16, 2018, the Subcommittee on Health, Employment,
Labor, and Pensions (HELP) held a hearing entitled ``Expanding
Affordable Health Care Options: Examining the Department of
Labor's Proposed Rule on Association Health Plans,'' which
examined the U.S. Department of Labor's (DOL) recent proposed
rule on AHPs as an alternative to Obamacare. Witnesses were Mr.
Christopher Condeluci, Principal and Sole Shareholder, CC Law
and Policy PLLC, Washington, D.C.; Mr. Michael McGrew, CEO,
McGrew Real Estate, Lawrence, Kansas; Ms. Catherine Monson, CEO
and President, FASTSIGNS International, Inc., Carrollton,
Texas; and Mr. John Arensmeyer, Founder and CEO, Small Business
Majority, Washington, D.C.
117TH CONGRESS
First Session--Hearing
On June 9, 2021, the Committee held a hearing entitled
``Examining the Policies and Priorities of the U.S. Department
of Labor.'' The Committee examined the Secretary of Labor's
views on the Trump administration's rule to expand AHPs, among
other topics. The sole witness was the Honorable Martin J.
Walsh, Secretary of Labor, Washington, D.C.
Second Session--Hearing
On February 17, 2022, the HELP Subcommittee held a hearing
entitled ``Exploring Pathways to Affordable, Universal Health
Coverage,'' which examined, among other things, the benefits of
expanding AHPs. The witnesses were Dr. Brian Blase, President,
Paragon Health Institute, Ponte Verde, Florida; Dr. Georges C.
Benjamin, Executive Director, the American Public Health
Association, Washington, D.C.; Ms. Katie Keith, Center on
Health Insurance Reforms, Georgetown University, Washington,
D.C.; and Mr. Robert B. Reich, Carmel P. Friesen Professor of
Public Policy, Goldman School of Public Policy, University of
California, Berkley, California.
118TH CONGRESS
First Session--Hearing
On April 26, 2023, the HELP Subcommittee held a hearing
entitled ``Reducing Health Care Costs for Working Americans and
Their Families,'' which examined the Association Health Plans
Act (H.R. 2868) and the possibility of lowering costs by
expanding AHPs, among other topics. Witnesses were Mr. Joel
White, President, Council for Affordable Health Coverage
(CAHC), Washington, D.C., Mrs. Tracy Watts, Senior Partners,
Mercer, Washington, D.C., Ms. Marcie Strause, Partner, Capitol
Benefits Group, Des Moines, Iowa, and Ms. Sabrina Corlette,
Senior Research Professor, Center on Health Insurance Reforms,
Georgetown University's Health Policy Institute, Washington,
D.C.
First Session--Legislative Action
On April 25, 2023, Rep. Walberg introduced the Association
Health Plans Act (H.R. 2868) with Reps. Virginia Foxx (R-NC),
Bob Good (R-VA), Rick Allen (R-GA), Dan Crenshaw (R-TX), and
Michael Burgess (R-TX) as original cosponsors. On June 6, 2023,
the Committee considered H.R. 2868 in legislative session and
reported it favorably, as amended, to the House of
Representatives by a recorded vote of 23-18. The Committee
adopted the following amendment to H.R. 2868 by voice vote:
Rep. Walberg offered an ANS clarifying that an organization has
to be actively in existence for two years prior to the
establishment of an AHP in order for the AHP to qualify as a
group health plan under H.R. 2868. In section 3, the ANS also
strikes ``employee welfare benefit plan'' and inserts ``group
health plan'' to clarify that premium rates are for health care
only.
119TH CONGRESS
First Session--Hearing
On April 2, 2025, the HELP Subcommittee held a hearing
entitled ``A Healthy Workforce Expanding Access and
Affordability in Employer-Sponsored Health Care,'' which
examined H.R. 2528, the Association Health Plans Act, among
other proposals, and also examined innovative solutions to
reduce health care costs for small businesses by expanding
choices and increasing access to affordable and high-quality
employer-sponsored health care. Witnesses were Ms. Angela
Shields, Chief Executive Officer, Tennessee REALTORS,
Nashville, Tennessee; Ms. Marcie Strouse, Partner, Capitol
Benefits Group, Des Moines, Iowa; and Ms. Bethany Lilly,
Executive Director, Public Policy, The Leukemia & Lymphoma
Society, Washington, D.C.
First Session--Legislative Action
On April 1, 2025, Committee Chairman Walberg introduced
H.R. 2528, the Association Health Plans Act, with HELP
Subcommittee Chairman Rick Allen (R-GA) and Reps. Bob Onder (R-
MO), Dan Crenshaw (R-TX), Stephanie Bice (R-OK), Kevin Kiley
(R-CA), Glenn Grothman (R-WI), Ryan Mackenzie (R-PA), and Bill
Huizenga (R-MI) as original cosponsors. On June 25, 2025, the
Committee considered H.R. 2528 in legislative session and
reported it favorably, as amended, to the House of
Representatives by a recorded vote of 21-15. The Committee
adopted the following amendment to H.R. 2528 by voice vote:
Chairman Walberg offered an ANS making technical changes.
Committee Views
INTRODUCTION
The health care challenges facing working families and
small businesses require urgent attention. Democrat policies
like Obamacare have sold Americans a faulty bill of goods and
have led to consolidation in the marketplace, skyrocketing
premiums, and limited access to quality health care. H.R. 2528,
the Association Health Plans Act, amends the Employee
Retirement Income Security Act of 1974 (ERISA) to improve
access to affordable health coverage options for workers
employed by small businesses. The bill amends ERISA to
authorize the creation of association health plans (AHPs)
sponsored by groups or associations of employers. The
legislation allows small businesses and self-employed
individuals to band together across state lines through
associations, thus increasing their bargaining power with plans
and providers and placing them on a more level playing field
with larger companies and unions. H.R. 2528 frees small
businesses from costly state-mandated benefit packages, spreads
risk for self-employed individuals, and lowers overhead costs,
enabling employers to offer more affordable health care
coverage to their workers and enabling self-employed
individuals to access more affordable health care coverage.
EMPLOYER-SPONSORED INSURANCE COVERAGE
Since World War II, employers have offered health care
benefits to recruit and retain talent and to ensure a healthy
and productive workforce. Employer-sponsored health insurance
covers almost 154 million American workers and family
members.\8\ According to the U.S. Census Bureau, 53.7 percent
of Americans were covered by employment-based health coverage
in 2023.\9\ When given the option for employment-based health
coverage, 75 percent of workers take up coverage.\10\ Almost
all businesses with at least 200 or more employees offer health
benefits.\11\ According to the Kaiser Family Foundation,
however, smaller firms (with three to 199 employees) are
significantly less likely to offer health benefits.\12\ As a
result, in 2024, just over half of all employers offered some
health benefits.\13\
---------------------------------------------------------------------------
\8\Kaiser Family Found., Employer Health Benefits: 2024 Annual
Survey, Employer Health Benefits 7, http://files.kff.org/attachment/
Employer-Health-Benefits-Survey-2024-
Annual-Survey.pdf.
\9\U.S. Census Bur., U.S. Dep't of Com., Health Insurance Coverage
in the United States: 2024 (issued Sept. 2024), www2.census.gov/
library/publications/2023/demo.pg60-284.pdf.
\10\Kaiser Family Found., supra note 8, at 68.
\11\Id. at 13 (stating that, in 2024, 98 percent of firms with 200
or more workers offered health benefits).
\12\Id. (stating that 53 percent of firms with less than 200
workers offer health benefits).
\13\Id.
---------------------------------------------------------------------------
Employer-provided health benefits are regulated by a number
of laws, including the Employee Retirement Income Security Act
(ERISA) as amended by the ACA. The Department of Labor (DOL)
implements and enforces ERISA. By virtue of its jurisdiction
over ERISA, the Committee has jurisdiction over employer-
provided health coverage.
Small and large employers offer health care coverage to
employees in self-funded arrangements (self-insurance) or
purchase fully insured plans. ERISA regulates both fully
insured and self-insured plans, but only self-insured plans are
exempt from a patchwork of benefit mandates imposed under state
insurance law. Employers sponsoring self-insured plans are not
subject to the same requirements under the ACA as those with
fully insured plans. Therefore, employer-provided plans have
different requirements and costs depending on funding
arrangements. Last year, approximately 63 percent of workers
with employer-sponsored health coverage were enrolled in a
self-funded plan,\14\ up from 48 percent in 1999\15\ and 55
percent in 2007.\16\
---------------------------------------------------------------------------
\14\Id. at 11.
\15\Kaiser Family Found., Employer Health Benefits: 1999 Annual
Survey, Employer Health Benefits 102, http://files.kff.org/wp-content/
uploads/2013/04/the-1999-employer-health benefits-annual-survey.pdf.
\16\Kaiser Family Found., Employer Health Benefits: 2007 Annual
Survey, Employer Health Benefits 146, http://files.kff.org/wp-content/
uploads/2013/04/76723.pdf.
---------------------------------------------------------------------------
OBAMACARE HAS FAILED, PROVING THE NEED FOR A BETTER WAY OF PROVIDING
ACCESS TO AFFORDABLE, QUALITY HEALTH CARE
The ACA attempted to expand access to health insurance
through a complicated structure of federal subsidies, Medicaid
expansion, and new rules governing health insurance markets.
The law has severely damaged America's health care system and
is collapsing under its own weight. For example, President
Obama famously promised the ACA would ``lower premiums by up to
$2,500 for a typical family per year,'' yet the evidence proves
otherwise.\17\ Additionally, small businesses and their
employees have been ``hurt badly by the cost increases caused
by the ACA.''\18\
---------------------------------------------------------------------------
\17\Jess Henig & Lori Robertson, Obama's Inflated Health `Savings',
FactCheck.org, Jun. 16, 2008, http://www.factcheck.org/2008/06/obamas-
inflated-health-savings/.
\18\Rescuing Americans from the Failed Health Care Law and
Advancing Patient-Centered Solutions: Hearing Before the H. Comm. on
Educ. & the Workforce, 115th Cong. 42 (2017) (statement of Scott
Bollenbacher, Managing Partner, Bollenbacher & Assoc., LLC).
---------------------------------------------------------------------------
On April 2, 2025, Ms. Marcie Strouse, Partner, Capitol
Benefits Group, testifying on behalf of the National Federation
of Independent Business (NFIB) before the HELP Subcommittee,
stated:
The small group insurance market is in a free fall,
resulting in fewer options, higher costs, and untenable
trade-offs. . . . Despite almost doubling in cost,
these ACA plans don't offer more value or quality, and
in some instances, they come with narrower networks.
That's simply unsustainable and it is why we must
advance bold, practical policy changes that give small
business owners more access and better options.\19\
---------------------------------------------------------------------------
\19\A Healthy Workforce: Expanding Access and Affordability in
Employer-Sponsored Health Care, Hearing Before the Subcomm. on Health,
Emp't, Lab. & Pensions of the H. Comm on Educ. & Workforce, 119th Cong.
(2025) (statement of Marcie Strouse, Partner, Capitol Benefits Group,
at 2-3) (internal citations omitted).
The cost of health care coverage has tangible adverse impacts
on growth, hiring, and workforce pay of small businesses.\20\
Ms. Strouse's testimony detailed these challenges:
---------------------------------------------------------------------------
\20\Small Bus. for am. Future, Survey: Health Care Costs Putting
Financial Pressure on Small Business (Oct. 2022), http://irp.cdn-
website.com/b4559992/files/uploaded/
SBAF%20National%20healthcare%20Survey%20Oct.%202022.pdf (reporting
survey results of 1,209 small business owners finding that, to offset
rising health care costs, nearly half increased prices of goods or
services, 38 percent delayed growth opportunities, and 28 percent
slowed hiring).
For small employers trying to recruit and retain
talent, the inability to offer competitive and
affordable health insurance is a serious disadvantage.
. . . Despite relentless challenges, small business
owners still believe in the power of offering health
care. Sixty-three percent say it is vital to attracting
and retaining talent. However, 94% find managing the
cost increasingly difficult. The disparity between
small and large employers is stark: small firms pay
nearly twice as much for health insurance as large
businesses. That uneven playing field puts Main Street
businesses at a competitive disadvantage--and America's
workforce at risk.\21\
---------------------------------------------------------------------------
\21\A Healthy Workforce, supra note 19 (Strouse statement at 3).
Individuals also struggle with the cost of health care. In
March 2024, the Kaiser Family Foundation reported that
individual health care debt is a significant problem in the
United States, half of adults find it difficult to afford
health care, and cost is often a barrier to obtaining needed
health care or filling prescriptions.\22\ On April 2, 2025, Ms.
Angela Shields, Controlling Executive Officer of the Tennessee
Realtors, testified before the HELP Subcommittee that 15
percent of National Association of Realtors (NAR) members are
uninsured, ``with the majority citing premiums and deductibles
as too expensive.'' Ms. Shields also stated that ``the ACA
created financial burdens and uncertainties, leaving many NAR
members with little choice but to either go without health
coverage altogether or pay at least $11,000 for a family before
accessing their health coverage under an ACA plan.''\23\
---------------------------------------------------------------------------
\22\Alex Montero et al., Kaiser Family Found., Americans'
Challenges With Health Care Costs (Mar. 1, 2024) (reporting that 41
percent of adults have medical or dental care debt owed to credit
cards, collections agencies, families and friends, banks, and other
lenders), https://www.kff.org/health-costs/issue-brief/americans-
challenges-with-health-care-costs/.
\23\A Healthy Workforce, supra note 19 (statement of Angela
Shields, CEO of the Tennessee Realtors, at 2-3).
---------------------------------------------------------------------------
The ACA placed additional mandates and administrative
burdens on employers, increasing the cost of insurance coverage
and making it more difficult to hire workers and grow their
businesses. According to a study by the American Action Forum,
ACA regulations have a significant negative impact on the labor
market. The study concluded that roughly 300,000 small business
jobs were lost, and 10,000 small businesses closed as a result
of the ACA's costs and regulations.\24\
---------------------------------------------------------------------------
\24\Ben Gitis & Sam Batkins, Update: Obamacare's Impact on Small
Business Wages and Employment, am. Action Forum (2017), https://
americanactionforum.org/research/update-obamacares-impact-small-
business-wages-employment/.
---------------------------------------------------------------------------
In the aftermath of the ACA, approximately 36 percent of
small businesses with fewer than 10 employees stopped offering
coverage, leaving workers with even fewer health care
options.\25\ In 2023, the offer rate for businesses with fewer
than 50 employees had dropped to 30.1 percent,\26\ compared
with 39.2 percent in 2010 when the ACA passed.\27\ Due to their
size and economies of scale, large businesses and labor
organizations have the ability to negotiate on behalf of their
employees for high-quality health care at more affordable
costs. By offering a qualified group health plan under ERISA,
these large employers and labor organizations are also exempt
from myriad state rules and regulations on health insurance.
Small businesses, however, do not have the same bargaining
power as larger businesses and are unable to band together to
increase their bargaining power in the health insurance
marketplace.
---------------------------------------------------------------------------
\25\Paul Fronstin, Ebri Educ. & Research Fund, Fewer Small
Employers Offering Health Coverage; Large Employers Holding Steady
(2016) (Jul. 2016), http://ebri.org/
content/fewer-small-employers-offering-health-coverage-large-employers-
holding-steady-3367 (studying the impact of the ACA on employer health
insurance offer rates).
\26\Agency for Healthcare & Quality, 2023 Medical Expenditure Panel
Survey-Insurance Component, Table 1.A.2. at 5 (2023), http://
meps.ahrq.gov/data_stats/summ_tables/insr/state/series_1/2023/
ic23_ia_g.pdf.
\27\Agency for Healthcare & Quality, 2010 Medical Expenditure Panel
Survey-Insurance Component, Table 1.A.2. at 5 (2010), http://
meps.ahrq.gov/data_stats/summ_tables/insr/state/series_1/2010/
ic10_ia_g.pdf. top reason.
---------------------------------------------------------------------------
According to a survey released by NFIB in March of 2023, 65
percent of small business employers that do not currently offer
coverage cite the cost of health insurance coverage as the top
reason.\28\ In his April 2023 testimony before the HELP
Subcommittee, Mr. Joel White, President of the Council for
Affordable Health Coverage, stated that ACA mandates applicable
to small businesses increase the cost of providing health care
coverage and limit choices: ``As Congress increased [costs for
small businesses] and limited their choices, the authors of ACA
created powerful incentives for small businesses to drop
coverage. And they did.''\29\
---------------------------------------------------------------------------
\28\Holly Wade, NFIB Research Ctr., Small Business Health Insurance
Survey (Mar. 2023), https://strgnfibcom.blob.core.windows.net/nfibcom/
Health-insurance-survey-NFIB.pdf.
\29\Reducing Health Care Costs for Working Americans and Their
Families: Hearing Before the Subcomm. on Health, Emp't, Lab. & Pensions
of the H. Comm. on Educ. & the Workforce, 118th Cong. 82 (2023)
(statement of Joel White, President, Council for Affordable Health
Coverage).
---------------------------------------------------------------------------
One significant factor contributing to the high cost of
health care for small employers is their inability to band
together to unlock the financial benefits of small business
pooling arrangements. These cost-saving benefits--economies of
scale, freedom from state regulation, and increased
administrative efficiencies--would help small employers access
coverage at a more affordable price and would decrease the
number of uninsured individuals who work in small businesses.
This is particularly important since small firms offering
coverage have decreased by almost ten percent since 2010, as
stated above. Ms. Shields testified that expanding AHPs would
address the damage to small businesses and individuals caused
by the ACA:
Federal law currently limits self-employed
individuals and most small employers to the ACA's
individual and small group insurance markets, where . .
. out-of-pocket costs are significantly higher and
access to medical providers is limited. By adding an
AHP option that offers the same health coverage as
large employers and unions, Congress could help provide
both small businesses and the self-employed with a
choice, empowering them to shop around and decide which
health coverage option fits best.\30\
---------------------------------------------------------------------------
\30\A Healthy Workforce, supra note 19 (statement of Angela
Shields, CEO, Tennessee Realtors, at 4).
---------------------------------------------------------------------------
THE NEED FOR SMALL BUSINESS POOLING
AHPs would give small businesses another option for
offering health insurance coverage. The Coalition to Protect
and Promote Association Health Plans (the ``AHP Coalition'')
has affirmed the benefits of AHPs, stating that ``AHPs offer
comprehensive coverage at a lower cost relative to ACA
`individual' and `small group' market plans.''\31\ The AHP
Coalition has provided data demonstrating significant savings
to employers in different industries from 5 to 35 percent, and
to participating self-employed individuals from 2 to 50
percent.\32\
---------------------------------------------------------------------------
\31\Id. (statement of The Coalition to Protect & Promote Ass'n
Health Plans).
\32\Office of Mgmt. & Budget, EO 12866 Meeting 1210-AC16,
Submission by the Coalition to Protect and Promote Association Health
Plans (Oct. 2, 2023), https://www.reginfo.gov/public/do/
viewEO12866Meeting?viewRule=true&rin=121009AC16&meetingId=
223574&acronym=121009DOL/EBSA.
---------------------------------------------------------------------------
AHPs allow small businesses to pool risk. Ms. Shield's
testimony underscores the advantages of risk pooling that AHPs
provide to small businesses:
For decades, large employers and unions have enjoyed
high-quality, low-cost health coverage AHPs would
provide the same options to employees of many small
businesses and self-employed individuals by allowing
them to group together to create larger and more
sustainable risk pools. These larger, more sustainable
risk pools would help them to achieve large employer
coverage terms and prices, including lower deductibles
and broader provider networks, relative to ACA
individual and small group plans.\33\
---------------------------------------------------------------------------
\33\A Healthy Workforce, supra note 19 (Shields statement at 4)
(internal citations omitted).
A key element of H.R. 2528 is allowing AHPs to self-fund,
which in turn would allow small businesses to band together
across state lines to offer coverage. Self-insuring also allows
employers to offer plans designed to meet the needs of their
employees while controlling costs. These plans provide
excellent, well-regulated benefits. As Ms. Strouse testified,
``Self insurance is one of the most effective ways . . . to
manage costs and improve plan design.''\34\ Ms. Strouse also
stated:
---------------------------------------------------------------------------
\34\Id. (Strouse statement at 3).
Allowing small businesses to band together across
industries to purchase health coverage, whether through
AHPs or other ERISA-regulated pooling arrangements,
would give them the same negotiating power that large
employers enjoy. This can result in lower premiums,
stronger networks, and better plan options. We should
level the playing field by removing outdated
restrictions that prevent small businesses from pooling
together, simply because they operate in different
industries.\35\
---------------------------------------------------------------------------
\35\Id. at 4.
Some states already allow pooling arrangements within the
state. AHPs remain subject to all federal and state laws
otherwise applicable to such plans, and the provisions of H.R.
2528 are not intended to modify the application or
interpretation of such laws to such plans.
TRUMP DEPARTMENT OF LABOR REGULATION EXPANDING AHPS
In June 2018, DOL issued a final regulation to expand the
groups and associations of employers eligible to sponsor
employment-based health coverage.\36\ The rule was intended to
expand access to affordable, high-quality health care options,
particularly for employees of small employers. In March 2019,
the U.S. District Court of the District of Columbia invalidated
key portions of the rule.\37\ The court found that the rule's
expansion of ``commonality of interest'' standards to include
geographic proximity (bona fide association provision) and
inclusion of self-employed individuals (working-owner
provision) were unlawful under ERISA, and the court therefore
set aside those provisions.\38\ In April 2019, the Trump DOL
appealed the ruling,\39\ and in February 2021, the appellate
court agreed to the Biden-Harris DOL's request to hold the
appeal in abeyance pending further action by the Biden-Harris
administration.\40\
---------------------------------------------------------------------------
\36\Definition of ``Employer'' Under Section 3(5) of ERISA--
Association Health Plans, 83 Fed. Reg. 28,912 (June 21, 2018).
\37\New York v. DOL, 363 F. Supp. 3d 109 (D.D.C. 2019).
\38\Id. at 141.
\39\News Release, U.S. Department of Labor Statement Relating to
the U.S. District Court Ruling in State of New York v. United States
Department of Labor (Apr. 29, 2019), https://www.dol.gov/newsroom/
releases/ebsa/ebsa20190429.
\40\New York v. DOL, No. 19-5125 (D.C. Cir. Feb. 8, 2021) (order).
---------------------------------------------------------------------------
In the brief period before the rule was blocked by the
district court, 28 new AHPs were established.\41\ According to
the AHP Coalition, several beneficial AHPs were ``discontinued
due to the legal uncertainty surrounding AHPs'' following the
adverse ruling by the district court.\42\ Due to the short
period these plans were operating, little data is available.
However, reported savings for the plans averaged 29 percent for
self-funded AHPs and 23 percent for fully insured AHPs.\43\
---------------------------------------------------------------------------
\41\Kev Coleman, Ass'n Health Plans, Inc., First Phase of New
Association Health Plans Reveal Promising Trends, https://
associationhealthplans.com/reports/new-ahp-study.
\42\Office of Mgmt. & Budget, EO 12866 Meeting 1210-AC16,
Submission by the Coalition to Protect and Promote Association Health
Plans (Oct. 2, 2023), https://www.reginfo.gov/public/do/
viewEO12866Meeting?viewRule=true&rin=1210-AC16&meetingId=
223574&acronym=1210-DOL/EBSA.
\43\Kev Coleman, supra note 41.
---------------------------------------------------------------------------
THE BIDEN-HARRIS ADMINISTRATION'S ATTACK ON SMALL BUSINESS OWNERS
In April 2024, the Biden-Harris DOL published a final rule
rescinding the 2018 Trump AHP rule without providing any
alternative rules for AHPs.\44\ The rule continued the Biden-
Harris administration's attempts to force all Americans into
one-size-fits-all government-run plans or stringently regulated
plans. The evidence showed that in the brief period before the
rule was blocked, AHPs did not offer narrow benefit designs,
contrary to the claims of the Biden-Harris rule.\45\
---------------------------------------------------------------------------
\44\Definition of ``Employer''--Association Health Plans, 89 Fed.
Reg. 34,106 (Apr. 30, 2024).
\45\Kev Coleman, supra note 41.
---------------------------------------------------------------------------
SUPPORT FOR CREATING OPTIONS AND FLEXIBILITY FOR SMALL BUSINESSES
Because it benefits both employers and working families,
AHP legislation has been consistently supported over the years,
including by a broad swath of groups representing job creators,
including NFIB, the National Association of Realtors, Paragon
Health Institute, and the National Association of Wholesaler-
Distributors.
CONCLUSION
H.R. 2528, the Association Health Plans Act, makes it
easier for small businesses to promote a healthy workforce and
offer more affordable health care coverage. By allowing small
businesses to join together in AHPs, the bill puts smaller
businesses on a more level playing field with larger companies
and unions, and it increases their bargaining power with
insurance providers. More importantly, it provides smaller
employers--many of whom have limited resources--with a greater
opportunity to offer their workers quality and affordable
health care coverage. H.R. 2528 would empower small businesses
to provide quality health care for their employees and self-
employed individuals to obtain quality affordable health care
coverage.
H.R. 2528 Section-By-Section Summary
Section 1. Short title
Section 1 provides that the short title is ``Association
Health Plans Act.''
Section 2. Treatment of group or association of employers
Section 2 amends the definition of ``employer'' in ERISA to
confirm that a group or association of employers--regardless of
profession or geography--may be considered a single large
employer for purposes of establishing and maintaining a group
health plan if the group or association:
Establishes a group health plan that covers
at least 51 employees;
Has been actively in existence for a minimum
of two years;
Has been formed in good faith for a purpose
other than purchasing health coverage;
Has no membership restrictions based on
health status-related factors;
Makes coverage available to all employees
regardless of health status;
Does not offer coverage to anyone outside
the group or association;
Has established a governing board with at
least 75 percent of board members duly elected by the
employer members participating in the health plan; and
Is not a health insurance issuer itself or
controlled or owned by a health insurance issuer or its
subsidiary.
For purposes of determining whether the group or association
includes at least 51 employees, all employees of employer
members of the group or association are aggregated and treated
as being employed by a single employer.
Section 2 grandfathers existing AHPs by allowing a group or
association to be considered an ``employer'' for purposes of
sponsoring an ERISA-covered health plan if the group or
association (1) satisfies criteria outlined in DOL advisory
opinions issued prior to the enactment of H.R. 2528 or (2)
satisfies any criteria in prospective DOL regulations.
Section 2 also allows self-employed individuals to
participate in an ERISA-covered health plan established by a
group or association by treating a self-employed individual as
an ``employer'' and an ``employee'' as well as a
``participant'' in the health plan. For these purposes, a self-
employed individual:
Does not have any common-law employees;
Has ownership right in a trade or business;
Earns wages or income from this trade or
business; and
Works at least 10 hours per week or 40 hours
per month.
Further, Section 2 requires that all AHPs have established
a governing board with at least 75 percent of board members
duly elected by the employer members participating in the
health plan. The board shall (1) determine whether a self-
employed individual satisfies the criteria to join a group or
association prior to the individual enrolling in the health
plan and (2) periodically monitor whether an individual
continues to be considered a self-employed individual. If the
board determines that a self-employed individual no longer
satisfies the criteria, the individual and their dependents
will no longer be eligible for coverage (other than COBRA
continuation coverage, if applicable) starting in the next plan
year, although an individual has the right to provide evidence
that he or she continues to meet (or subsequently meets) the
criteria to maintain or restore coverage.
Finally, Section 2 also clarifies that participation in an
ERISA-covered plan sponsored by a group or association of
employers is not evidence of joint employment.
Section 3. Rules applicable to employee welfare benefit plans
established and maintained by a group or association of
employers
Section 3 requires that premiums and underwriting be based
on the risk pool of employer groups instead of on an individual
level. A group or association of employers made up solely of
employers with at least one common-law employee (i.e., a group
or association with no self-employed individuals) may develop
premium rates in the following manner:
Establish premium rates after considering
the collective health claims experience of all
employees and their dependents participating in the
plan; and
Vary rates up or down for each individual
employer member of the group or association based on
the collective health claims experience of the
employees employed by each respective employer.
A mixed group or association of employers that includes
both employers with at least one common-law employee and self-
employed individuals may develop premium rates in the same
manner as above. However, for purposes of varying the premiums
by the employer member, all self-employed individuals must be
aggregated and counted together as their own single group made
up of at least 20 self-employed individuals. Any premium
variation for this self-employed individual group shall
consider the collective health claims experience of all self-
employed individuals and their dependents in this group.
For a group or association of employers made up solely of
self-employed individuals (i.e., a group or association with no
employers with at least one common-law employee), premium rates
will be developed by considering the collective health claims
experience of all the self-employed individuals and their
dependents participating in the plan. The base rates will then
be charged equally to all self-employed individuals and their
dependents participating in the plan. If the aggregated group
of self-employed individuals is less than 20 individuals, this
group or association cannot permit self-employed individuals to
participate in the plan.
Section 3 reconfirms current law and reiterates that an
ERISA-covered health plan shall not establish a rule for
eligibility or continued eligibility in the health plan that
discriminates against any participant based on a health status-
related factor; require any participant to pay a premium rate
that is higher than the premium rate similarly situated
individuals pay based on a health-status-related factor
relating to that participant; or deny coverage based on a pre-
existing condition.
Section 4. Rules of construction
Section 4 confirms current law and requires an ERISA-
covered health plan to comply with the ACA's group health plan
coverage requirements and ERISA's coverage requirements.
Explanation of Amendments
The amendment in the nature of a substitute is explained in
the body of this report.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch. H.R. 2528 takes important steps to expand access to
affordable, high-quality healthcare coverage for small
employers and individuals working in the private sector. H.R.
2528 applies to the cost of health care for private sector
employees and independent contractors and therefore does not
apply to the Legislative Branch.
Unfunded Mandate Statement
Pursuant to Section 423 of the Congressional Budget and
Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended
by Section 101(a)(2) of the Unfunded Mandates Reform Act of
1995, Pub. L. No. 104-4), the Committee traditionally adopts as
its own the cost estimate prepared by the Director of the
Congressional Budget Office (CBO) pursuant to section 402 of
the Congressional Budget and Impoundment Control Act of 1974.
The Committee reports that because this cost estimate was not
timely submitted to the Committee before the filing of this
report, the Committee is not in a position to make a cost
estimate for H.R. 2528.
Earmark Statement
H.R. 2528 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of House Rule XXI.
Roll Call Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
Statement of General Performance Goals and Objectives
In accordance with clause (3)(c) of House rule XIII, the
goal of H.R. 2528, is to expand access to quality health care
at lower cost to employers, employees, and self-employed
individuals.
Duplication of Federal Programs
No provision of H.R. 2528 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the committee's oversight findings and recommendations are
reflected in the body of this report.
Required Committee Hearing
In compliance with clause 3(c)(6) of rule XIII the
following hearing held during the 119th Congress was used to
develop or consider H.R. 2528: On April 2, 2025, the
Committee's Health, Employment, Labor and Pensions Subcommittee
on Education and Workforce held a hearing on ``A Healthy
Workforce Expanding Access and Affordability in Employer-
Sponsored Health Care.''
New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, a cost estimate was not made
available to the Committee in time for the filing of this
report. The Chairman of the Committee shall cause such estimate
to be printed in the Congressional Record upon its receipt by
the Committee.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 2528.
However, clause 3(d)(2)(B) of that Rule provides that this
requirement does not apply when, as with the present report,
the Committee has requested a cost estimate for the bill from
the Director of the Congressional Budget Office.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974
short title and table of contents
Section 1. This Act may be cited as the ``Employee Retirement
Income Security Act of 1974''.
TABLE OF CONTENTS
Sec. 1. Short title and table of contents.
* * * * * * *
TITLE I--PROTECTION OF EMPLOYEE BENEFIT RIGHTS
Subtitle B--Regulatory Provisions
* * * * * * *
Part 7--Group Health Plan Requirements
* * * * * * *
Subpart C--General Provisions
Sec. 731. Preemption; State flexibility; construction.
Sec. 732. Special rules relating to group health plans.
Sec. 733. Definitions.
Sec. 734. Regulations.
Sec. 735. Standardized reporting format.
Sec. 736. Rules applicable to employee welfare benefit plans established
and maintained by a group or association of employers.
* * * * * * *
TITLE I--PROTECTION OF EMPLOYEE BENEFIT RIGHTS
Subtitle A--General Provisions
* * * * * * *
DEFINITIONS
Sec. 3. For purposes of this title:
(1) The terms ``employee welfare benefit plan'' and ``welfare
plan'' mean any plan, fund, or program which was heretofore or
is hereafter established or maintained by an employer or by an
employee organization, or by both, to the extent that such
plan, fund, or program was established or is maintained for the
purpose of providing for its participants or their
beneficiaries, through the purchase of insurance or otherwise,
(A) medical, surgical, or hospital care or benefits, or
benefits in the event of sickness, accident, disability, death
or unemployment, or vacation benefits, apprenticeship or other
training programs, or day care centers, scholarship funds, or
prepaid legal services, or (B) any benefit described in section
302(c) of the Labor Management Relations Act, 1947 (other than
pensions on retirement or death, and insurance to provide such
pensions).
(2)(A) Except as provided in subparagraph (B), the terms
``employee pension benefit plan'' and ``pension plan'' mean any
plan, fund, or program which was heretofore or is hereafter
established or maintained by an employer or by an employee
organization, or by both, to the extent that by its express
terms or as a result of surrounding circumstances such plan,
fund, or program--
(i) provides retirement income to employees, or
(ii) results in a deferral of income by employees for
periods extending to the termination of covered
employment or beyond,
regardless of the method of calculating the contributions made
to the plan, the method of calculating the benefits under the
plan or the method of distributing benefits from the plan. A
distribution from a plan, fund, or program shall not be treated
as made in a form other than retirement income or as a
distribution prior to termination of covered employment solely
because such distribution is made to an employee who has
attained age 62 and who is not separated from employment at the
time of such distribution.
(B) The Secretary may by regulation prescribe rules
consistent with the standards and purposes of this Act
providing one or more exempt categories under which--
(i) severance pay arrangements, and
(ii) supplemental retirement income payments, under
which the pension benefits of retirees or their
beneficiaries are supplemented to take into account
some portion or all of the increases in the cost of
living (as determined by the Secretary of Labor) since
retirement,
shall, for purposes of this title, be treated as welfare plans
rather than pension plans. In the case of any arrangement or
payment a principal effect of which is the evasion of the
standards or purposes of this Act applicable to pension plans,
such arrangement or payment shall be treated as a pension plan.
An applicable voluntary early retirement incentive plan (as
defined in section 457(e)(11)(D)(ii) of the Internal Revenue
Code of 1986) making payments or supplements described in
section 457(e)(11)(D)(i) of such Code, and an applicable
employment retention plan (as defined in section 457(f)(4)(C)
of such Code) making payments of benefits described in section
457(f)(4)(A) of such Code, shall, for purposes of this title,
be treated as a welfare plan (and not a pension plan) with
respect to such payments and supplements.
(C) A pooled employer plan shall be treated as--
(i) a single employee pension benefit plan or
single pension plan; and
(ii) a plan to which section 210(a) applies.
(3) The term ``employee benefit plan'' or ``plan'' means an
employee welfare benefit plan or an employee pension benefit
plan or a plan which is both an employee welfare benefit plan
and an employee pension benefit plan.
(4) The term ``employee organization'' means any labor union
or any organization of any kind, or any agency or employee
representation committee, association, group, or plan, in which
employees participate and which exists for the purpose, in
whole or in part, of dealing with employers concerning an
employee benefit plan, or other matters incidental to
employment relationships; or any employees' beneficiary
association organized for the purpose in whole or in part, of
establishing such a plan.
(5) [The term] (A) The term ``employer'' means any person
acting directly as an employer, or indirectly in the interest
of an employer, in relation to an employee benefit plan; and
includes a group or association of employers acting for an
employer in such capacity.
(B) For purposes of subparagraph (A), a group or association
of employers shall be treated as an ``employer'' solely for
purposes of sponsoring a group health plan, regardless of
whether the employers composing such group or association are
in the same industry, trade, or profession, if such group or
association--
(i)(I) has established and maintains an employee
welfare benefit plan that is a group health plan (as
defined in section 733(a)(1));
(II) provides coverage under such plan to at least 51
employees after all of the employees employed by all of
the employer members of such group or association have
been aggregated and counted together as described in
subparagraph (D);
(III) has been actively in existence for at least 2
years;
(IV) has been formed and maintained in good faith for
purposes other than providing medical care (as defined
in section 733(a)(2)) through the purchase of insurance
or otherwise;
(V) does not condition membership in the group or
association on any health status-related factor (as
described in section 702(a)(1)) relating to any
individual;
(VI) makes coverage under such plan available to all
employer members of such group or association
regardless of any health status-related factor (as
described in section 702(a)(1)) relating to such
employer members;
(VII) does not provide coverage under such plan to
any individual other than an employee of an employer
member of such group or association;
(VIII) has established a governing board with by-laws
or other similar indications of formality to manage and
operate such plan in both form and substance, of which
at least 75 percent of the board members shall be made
up of employer members of such group or association
participating in the plan that are duly elected by each
participating employer member casting 1 vote during a
scheduled election; and
(IX) is not a health insurance issuer (as defined in
section 733(b)(2)), and is not owned or controlled by
such a health insurance issuer or by a subsidiary or
affiliate of such a health insurance issuer, other than
to the extent such a health insurance issuer may
participate in the group or association as a member;
(ii) is structured in good faith with any set of
criteria to qualify for such treatment in any advisory
opinion issued prior to the date of enactment of the
Association Health Plans Act; or
(iii) meets any other set of criteria to qualify for
such treatment that the Secretary by regulation may
provide.
(C)(i) For purposes of subparagraph (B), a self-employed
individual shall be treated as--
(I) an employer who may become a member of a group or
association of employers;
(II) an employee who may participate in an employee
welfare benefit plan established and maintained by such
group or association; and
(III) a participant of such plan subject to the
eligibility determination and monitoring requirements
set forth in clause (iii).
(ii) For purposes of this subparagraph, the term ``self-
employed individual'' means an individual who--
(I) does not have any common law employees;
(II) has a bona fide ownership right in a trade or
business, regardless of whether such trade or business
is incorporated or unincorporated;
(III) earns wages (as defined in section 3121(a) of
the Internal Revenue Code of 1986) or self-employment
income (as defined in section 1402(b) of such Code)
from such trade or business; and
(IV) works at least 10 hours a week or 40 hours per
month providing personal services to such trade or
business.
(iii) The board of a group or association of employers
shall--
(I) initially determine whether an individual meets
the requirements under clause (ii) to be considered to
a self-employed individual for the purposes of being
treated as an--
(aa) employer member of such group or
association (in accordance with clause (i)(I));
and
(bb) employee who may participate in the
employee welfare benefit plan established and
maintained by such group or association (in
accordance with clause (i)(II));
(II) through reasonable monitoring procedures,
periodically determine whether the individual continues
to meet such requirements; and
(III) if the board determines that an individual no
longer meets such requirements, not make such plan
coverage available to such individual (or dependents
thereof) for any plan year following the plan year
during which the board makes such determination. If,
subsequent to a determination that an individual no
longer meets such requirements, such individual
furnishes evidence of satisfying such requirements,
such individual (and dependents thereof) shall be
eligible to receive plan coverage.
(D) For purposes of subparagraph (B), all of the employees
(including self-employed individuals) employed by all of the
employer members (including self-employed individuals) of a
group or association of employers shall be--
(i) treated as participants in a single plan multiple
employer welfare arrangement; and
(ii) aggregated and counted together for purposes of
any regulation of an employee welfare benefit plan
established and maintained by such group or
association.
(6) The term ``employee'' means any individual employed by an
employer.
(7) The term ``participant'' means any employee or former
employee of an employer, or any member or former member of an
employee organization, who is or may become eligible to receive
a benefit of any type from an employee benefit plan which
covers employees of such employer or members of such
organization, or whose beneficiaries may be eligible to receive
any such benefit.
(8) The term ``beneficiary'' means a person designated by a
participant, or by the terms of an employee benefit plan, who
is or may become entitled to a benefit thereunder.
(9) The term ``person'' means an individual, partnership,
joint venture, corporation, mutual company, joint-stock
company, trust, estate, unincorporated organization,
association, or employee organization.
(10) The term ``State'' includes any State of the United
States, the District of Columbia, Puerto Rico, the Virgin
Islands, American Samoa, Guam, Wake Island, and the Canal Zone.
The term ``United States'' when used in the geographic sense
means the States and the Outer Continental Shelf lands defined
in the Outer Continental Shelf Lands Act (43 U.S.C. 1331-1343).
(11) The term ``commerce'' means trade, traffic, commerce,
transportation, or communication between any State and any
place outside thereof.
(12) The term ``industry or activity affecting commerce''
means any activity, business, or industry in commerce or in
which a labor dispute would hinder or obstruct commerce or the
free flow of commerce, and includes any activity or industry
``affecting commerce'' within the meaning of the Labor
Management Relations Act, 1947, or the Railway Labor Act.
(13) The term ``Secretary'' means the Secretary of Labor.
(14) The term ``party in interest'' means, as to an employee
benefit plan--
(A) any fiduciary (including, but not limited to, any
administrator, officer, trustee, or custodian),
counsel, or employee of such employee benefit plan;
(B) a person providing services to such plan;
(C) an employer any of whose employees are covered by
such plan;
(D) an employee organization any of whose members are
covered by such plan;
(E) an owner, direct or indirect, of 50 percent or
more of--
(i) the combined voting power of all classes
of stock entitled to vote or the total value of
shares of all classes of stock of a
corporation,
(ii) the capital interest or the profits
interest of a partnership, or
(iii) the beneficial interest of a trust or
unincorporated enterprise,
which is an employer or an employee organization
described in subparagraph (C) or (D);
(F) a relative (as defined in paragraph (15)) of any
individual described in subparagraph (A), (B), (C), or
(E);
(G) a corporation, partnership, or trust or estate of
which (or in which) 50 percent or more of--
(i) the combined voting power of all classes
of stock entitled to vote or the total value of
shares of all classes of stock of such
corporation,
(ii) the capital interest or profits interest
of such partnership, or
(iii) the beneficial interest of such trust
or estate,
is owned directly or indirectly, or held by persons
described in subparagraph (A), (B), (C), (D), or (E);
(H) an employee, officer, director (or an individual
having powers or responsibilities similar to those of
officers or directors), or a 10 percent or more
shareholder directly or indirectly, of a person
described in subparagraph (B), (C), (D), (E), or (G),
or of the employee benefit plan; or
(I) a 10 percent or more (directly or indirectly in
capital or profits) partner or joint venturer of a
person described in subparagraph (B), (C), (D), (E), or
(G).
The Secretary, after consultation and coordination with the
Secretary of the Treasury, may by regulation prescribe a
percentage lower than 50 percent for subparagraph (E) and (G)
and lower than 10 percent for subparagraph (H) or (I). The
Secretary may prescribe regulations for determining the
ownership (direct or indirect) of profits and beneficial
interests, and the manner in which indirect stockholdings are
taken into account. Any person who is a party in interest with
respect to a plan to which a trust described in section
501(c)(22) of the Internal Revenue Code of 1986 is permitted to
make payments under section 4223 shall be treated as a party in
interest with respect to such trust.
(15) The term ``relative'' means a spouse, ancestor, lineal
descendant, or spouse of a lineal descendant.
(16)(A) The term ``administrator'' means--
(i) the person specifically so designated by the
terms of the instrument under which the plan is
operated;
(ii) if an administrator is not so designated, the
plan sponsor; or
(iii) in the case of a plan for which an
administrator is not designated and a plan sponsor
cannot be identified, such other person as the
Secretary may by regulation prescribe.
(B) The term ``plan sponsor'' means (i) the employer in the
case of an employee benefit plan established or maintained by a
single employer, (ii) the employee organization in the case of
a plan established or maintained by an employee organization,
(iii) in the case of a plan established or maintained by two or
more employers or jointly by one or more employers and one or
more employee organizations, the association, committee, joint
board of trustees, or other similar group of representatives of
the parties who establish or maintain the plan, or (iv) in the
case of a pooled employer plan, the pooled plan provider.
(17) The term ``separate account'' means an account
established or maintained by an insurance company under which
income, gains, and losses, whether or not realized, from assets
allocated to such account, are, in accordance with the
applicable contract, credited to or charged against such
account without regard to other income, gains, or losses of the
insurance company.
(18) The term ``adequate consideration'' when used in part 4
of subtitle B means (A) in the case of a security for which
there is a generally recognized market, either (i) the price of
the security prevailing on a national securities exchange which
is registered under section 6 of the Securities Exchange Act of
1934, or (ii) if the security is not traded on such a national
securities exchange, a price not less favorable to the plan
than the offering price for the security as established by the
current bid and asked prices quoted by persons independent of
the issuer and of any party in interest; and (B) in the case of
an asset other than a security for which there is a generally
recognized market, the fair market value of the asset as
determined in good faith by the trustee or named fiduciary
pursuant to the terms of the plan and in accordance with
regulations promulgated by the Secretary.
(19) The term ``nonforfeitable'' when used with respect to a
pension benefit or right means a claim obtained by a
participant or his beneficiary to that part of an immediate or
deferred benefit under a pension plan which arises from the
participant's service, which is unconditional, and which is
legally enforceable against the plan. For purposes of this
paragraph, a right to an accrued benefit derived from employer
contributions shall not be treated as forfeitable merely
because the plan contains a provision described in section
203(a)(3).
(20) The term ``security'' has the same meaning as such term
has under section 2(1) of the Securities Act of 1933 (15 U.S.C.
77b(1)).
(21)(A) Except as otherwise provided in subparagraph (B), a
person is a fiduciary with respect to a plan to the extent (i)
he exercises any discretionary authority or discretionary
control respecting management of such plan or exercises any
authority or control respecting management or disposition of
its assets, (ii) he renders investment advice for a fee or
other compensation, direct or indirect, with respect to any
moneys or other property of such plan, or has any authority or
responsibility to do so, or (iii) he has any discretionary
authority or discretionary responsibility in the administration
of such plan. Such term includes any person designated under
section 405(c)(1)(B).
(B) If any money or other property of an employee benefit
plan is invested in securities issued by an investment company
registered under the Investment Company Act of 1940, such
investment shall not by itself cause such investment company or
such investment company's investment adviser or principal
underwriter to be deemed to be a fiduciary or a party in
interest as those terms are defined in this title, except
insofar as such investment company or its investment adviser or
principal underwriter acts in connection with an employee
benefit plan covering employees of the investment company, the
investment adviser, or its principal underwriter. Nothing
contained in this subparagraph shall limit the duties imposed
on such investment company, investment adviser, or principal
underwriter by any other law.
(22) The term ``normal retirement benefit'' means the greater
of the early retirement benefit under the plan, or the benefit
under the plan commencing at normal retirement age. The normal
retirement benefit shall be determined without regard to--
(A) medical benefits, and
(B) disability benefits not in excess of the
qualified disability benefit.
For purposes of this paragraph, a qualified disability benefit
is a disability benefit provided by a plan which does not
exceed the benefit which would be provided for the participant
if he separated from the service at normal retirement age. For
purposes of this paragraph, the early retirement benefit under
a plan shall be determined without regard to any benefit under
the plan which the Secretary of the Treasury finds to be a
benefit described in section 204(b)(1)(G).
(23) The term ``accrued benefit'' means--
(A) in the case of a defined benefit plan, the
individual's accrued benefit determined under the plan
and, except as provided in section 204(c)(3), expressed
in the form of an annual benefit commencing at normal
retirement age, or
(B) in the case of a plan which is an individual
account plan, the balance of the individual's account.
The accrued benefit of an employee shall not be less than the
amount determined under section 204(c)(2)(B) with respect to
the employee's accumulated contribution.
(24) The term ``normal retirement age'' means the earlier
of--
(A) the time a plan participant attains normal
retirement age under the plan, or
(B) the later of--
(i) the time a plan participant attains age
65, or
(ii) the 5th anniversary of the time a plan
participant commenced participation in the
plan.
(25) The term ``vested liabilities'' means the present value
of the immediate or deferred benefits available at normal
retirement age for participants and their beneficiaries which
are nonforfeitable.
(26) The term ``current value'' means fair market value where
available and otherwise the fair value as determined in good
faith by a trustee or a named fiduciary (as defined in section
402(a)(2)) pursuant to the terms of the plan and in accordance
with regulations of the Secretary, assuming an orderly
liquidation at the time of such determination.
(27) The term ``present value'', with respect to a liability,
means the value adjusted to reflect anticipated events. Such
adjustments shall conform to such regulations as the Secretary
of the Treasury may prescribe.
(28) The term ``normal service cost'' or ``normal cost''
means the annual cost of future pension benefits and
administrative expenses assigned, under an actuarial cost
method, to years subsequent to a particular valuation date of a
pension plan. The Secretary of the Treasury may prescribe
regulations to carry out this paragraph.
(29) The term ``accrued liability'' means the excess of the
present value, as of a particular valuation date of a pension
plan, of the projected future benefit costs and administrative
expenses for all plan participants and beneficiaries over the
present value of future contributions for the normal cost of
all applicable plan participants and beneficiaries. The
Secretary of the Treasury may prescribe regulations to carry
out this paragraph.
(30) The term ``unfunded accrued liability'' means the excess
of the accrued liability, under an actuarial cost method which
so provides, over the present value of the assets of a pension
plan. The Secretary of the Treasury may prescribe regulations
to carry out this paragraph.
(31) The term ``advance funding actuarial cost method'' or
``actuarial cost method'' means a recognized actuarial
technique utilized for establishing the amount and incidence of
the annual actuarial cost of pension plan benefits and
expenses. Acceptable actuarial cost methods shall include the
accrued benefit cost method (unit credit method), the entry age
normal cost method, the individual level premium cost method,
the aggregate cost method, the attained age normal cost method,
and the frozen initial liability cost method. The terminal
funding cost method and the current funding (pay-as-you-go)
cost method are not acceptable actuarial cost methods. The
Secretary of the Treasury shall issue regulations to further
define acceptable actuarial cost methods.
(32) The term ``governmental plan'' means a plan established
or maintained for its employees by the Government of the United
States, by the government of any State or political subdivision
thereof, or by any agency or instrumentality of any of the
foregoing. The term ``governmental plan'' also includes any
plan to which the Railroad Retirement Act of 1935 or 1937
applies, and which is financed by contributions required under
that Act and any plan of an international organization which is
exempt from taxation under the provisions of the International
Organizations Immunities Act (59 Stat. 669). The term
``governmental plan'' includes a plan which is established and
maintained by an Indian tribal government (as defined in
section 7701(a)(40) of the Internal Revenue Code of 1986), a
subdivision of an Indian tribal government (determined in
accordance with section 7871(d) of such Code), or an agency or
instrumentality of either, and all of the participants of which
are employees of such entity substantially all of whose
services as such an employee are in the performance of
essential governmental functions but not in the performance of
commercial activities (whether or not an essential government
function)
(33)(A) The term ``church plan'' means a plan established and
maintained (to the extent required in clause (ii) of
subparagraph (B)) for its employees (or their beneficiaries) by
a church or by a convention or association of churches which is
exempt from tax under section 501 of the Internal Revenue Code
of 1986.
(B) The term ``church plan'' does not include a plan--
(i) which is established and maintained primarily for
the benefit of employees (or their beneficiaries) of
such church or convention or association of churches
who are employed in connection with one or more
unrelated trades or businesses (within the meaning of
section 513 of the Internal Revenue Code of 1986), or
(ii) if less than substantially all of the
individuals included in the plan are individuals
described in subparagraph (A) or in clause (ii) of
subparagraph (C) (or their beneficiaries).
(C) For purposes of this paragraph--
(i) A plan established and maintained for its
employees (or their beneficiaries) by a church or by a
convention or association of churches includes a plan
maintained by an organization, whether a civil law
corporation or otherwise, the principal purpose or
function of which is the administration or funding of a
plan or program for the provision of retirement
benefits or welfare benefits, or both, for the
employees of a church or a convention or association of
churches, if such organization is controlled by or
associated with a church or a convention or association
of churches.
(ii) The term employee of a church or a convention or
association of churches includes--
(I) a duly ordained, commissioned, or
licensed minister of a church in the exercise
of his ministry, regardless of the source of
his compensation;
(II) an employee of an organization, whether
a civil law corporation or otherwise, which is
exempt from tax under section 501 of the
Internal Revenue Code of 1986 and which is
controlled by or associated with a church or a
convention or association of churches; and
(III) an individual described in clause (v).
(iii) A church or a convention or association of
churches which is exempt from tax under section 501 of
the Internal Revenue Code of 1986 shall be deemed the
employer of any individual included as an employee
under clause (ii).
(iv) An organization, whether a civil law corporation
or otherwise, is associated with a church or a
convention or association of churches if it shares
common religious bonds and convictions with that church
or convention or association of churches.
(v) If an employee who is included in a church plan
separates from the service of a church or a convention
or association of churches or an organization, whether
a civil law corporation or otherwise, which is exempt
from tax under section 501 of the Internal Revenue Code
of 1986 and which is controlled by or associated with a
church or a convention or association of churches, the
church plan shall not fail to meet the requirements of
this paragraph merely because the plan--
(I) retains the employee's accrued benefit or
account for the payment of benefits to the
employee or his beneficiaries pursuant to the
terms of the plan; or
(II) receives contributions on the employee's
behalf after the employee's separation from
such service, but only for a period of 5 years
after such separation, unless the employee is
disabled (within the meaning of the disability
provisions of the church plan or, if there are
no such provisions in the church plan, within
the meaning of section 72(m)(7) of the Internal
Revenue Code of 1986) at the time of such
separation from service.
(D)(i) If a plan established and maintained for its employees
(or their beneficiaries) by a church or by a convention or
association of churches which is exempt from tax under section
501 of the Internal Revenue Code of 1986 fails to meet one or
more of the requirements of this paragraph and corrects its
failure to meet such requirements within the correction period,
the plan shall be deemed to meet the requirements of this
paragraph for the year in which the correction was made and for
all prior years.
(ii) If a correction is not made within the correction
period, the plan shall be deemed not to meet the requirements
of this paragraph beginning with the date on which the earliest
failure to meet one or more of such requirements occurred.
(iii) For purposes of this subparagraph, the term
``correction period'' means--
(I) the period ending 270 days after the date of
mailing by the Secretary of the Treasury of a notice of
default with respect to the plan's failure to meet one
or more of the requirements of this paragraph; or
(II) any period set by a court of competent
jurisdiction after a final determination that the plan
fails to meet such requirements, or, if the court does
not specify such period, any reasonable period
determined by the Secretary of the Treasury on the
basis of all the facts and circumstances, but in any
event not less than 270 days after the determination
has become final; or
(III) any additional period which the Secretary of
the Treasury determines is reasonable or necessary for
the correction of the default,
whichever has the latest ending date.
(34) The term ``individual account plan'' or ``defined
contribution plan'' means a pension plan which provides for an
individual account for each participant and for benefits based
solely upon the amount contributed to the participant's
account, and any income, expenses, gains and losses, and any
forfeitures of accounts of other participants which may be
allocated to such participant's account.
(35) The term ``defined benefit plan'' means a pension plan
other than an individual account plan; except that a pension
plan which is not an individual account plan and which provides
a benefit derived from employer contributions which is based
partly on the balance of the separate account of a
participant--
(A) for the purposes of section 202, shall be treated
as an individual account plan, and
(B) for the purposes of paragraph (23) of this
section and section 204, shall be treated as an
individual account plan to the extent benefits are
based upon the separate account of a participant and as
a defined benefit plan with respect to the remaining
portion of benefits under the plan.
(36) The term ``excess benefit plan'' means a plan maintained
by an employer solely for the purpose of providing benefits for
certain employees in excess of the limitations on contributions
and benefits imposed by section 415 of the Internal Revenue
Code of 1986 on plans to which that section applies, without
regard to whether the plan is funded. To the extent that a
separable part of a plan (as determined by the Secretary of
Labor) maintained by an employer is maintained for such
purpose, that part shall be treated as a separate plan which is
an excess benefit plan.
(37)(A) The term ``multiemployer plan'' means a plan--
(i) to which more than one employer is required to
contribute,
(ii) which is maintained pursuant to one or more
collective bargaining agreements between one or more
employee organizations and more than one employer, and
(iii) which satisfies such other requirements as the
Secretary may prescribe by regulation.
(B) For purposes of this paragraph, all trades or businesses
(whether or not incorporated) which are under common control
within the meaning of section 4001(b)(1) are considered a
single employer.
(C) Notwithstanding subparagraph (A), a plan is a
multiemployer plan on and after its termination date if the
plan was a multiemployer plan under this paragraph for the plan
year preceding its termination date.
(D) For purposes of this title, notwithstanding the preceding
provisions of this paragraph, for any plan year which began
before the date of the enactment of the Multiemployer Pension
Plan Amendments Act of 1980, the term ``multiemployer plan''
means a plan described in section 3(37) of this Act as in
effect immediately before such date.
(E) Within one year after the date of the enactment of the
Multiemployer Pension Plan Amendments Act of 1980, a
multiemployer plan may irrevocably elect, pursuant to
procedures established by the corporation and subject to the
provisions of sections 4403(b) and (c), that the plan shall not
be treated as a multiemployer plan for all purposes under this
Act or the Internal Revenue Code of 1954 if for each of the
last 3 plan years ending prior to the effective date of the
Multiemployer Pension Plan Amendments Act of 1980--
(i) the plan was not a multiemployer plan because the
plan was not a plan described in section 3(37)(A)(iii)
of this Act and section 414(f)(1)(C) of the Internal
Revenue Code of 1954 (as such provisions were in effect
on the day before the date of the enactment of the
Multiemployer Pension Plan Amendments Act of 1980 );
and
(ii) the plan had been identified as a plan that was
not a multiemployer plan in substantially all its
filings with the corporation, the Secretary of Labor
and the Secretary of the Treasury.
(F)(i) For purposes of this title a qualified football
coaches plan--
(I) shall be treated as a multiemployer plan to the
extent not inconsistent with the purposes of this
subparagraph; and
(II) notwithstanding section 401(k)(4)(B) of the
Internal Revenue Code of 1986, may include a qualified
cash and deferred arrangement.
(ii) For purposes of this subparagraph, the term ``qualified
football coaches plan'' means any defined contribution plan
which is established and maintained by an organization--
(I) which is described in section 501(c) of such
Code;
(II) the membership of which consists entirely of
individuals who primarily coach football as full-time
employees of 4-year colleges or universities described
in section 170(b)(1)(A)(ii) of such Code; and
(III) which was in existence on September 18, 1986.
(G)(i) Within 1 year after the enactment of the
Pension Protection Act of 2006--
(I) an election under subparagraph (E) may be
revoked, pursuant to procedures prescribed by
the Pension Benefit Guaranty Corporation, if,
for each of the 3 plan years prior to the date
of the enactment of that Act, the plan would
have been a multiemployer plan but for the
election under subparagraph (E), and
(II) a plan that meets the criteria in
clauses (i) and (ii) of subparagraph (A) of
this paragraph or that is described in clause
(vi) may, pursuant to procedures prescribed by
the Pension Benefit Guaranty Corporation, elect
to be a multiemployer plan, if--
(aa) for each of the 3 plan years
immediately preceding the first plan
year for which the election under this
paragraph is effective with respect to
the plan, the plan has met those
criteria or is so described,
(bb) substantially all of the plan's
employer contributions for each of
those plan years were made or required
to be made by organizations that were
exempt from tax under section 501 of
the Internal Revenue Code of 1986, and
(cc) the plan was established prior
to September 2, 1974.
(ii) An election under this subparagraph shall be
effective for all purposes under this Act and under the
Internal Revenue Code of 1986, starting with any plan
year beginning on or after January 1, 1999, and ending
before January 1, 2008, as designated by the plan in
the election made under clause (i)(II).
(iii) Once made, an election under this subparagraph
shall be irrevocable, except that a plan described in
clause (i)(II) shall cease to be a multiemployer plan
as of the plan year beginning immediately after the
first plan year for which the majority of its employer
contributions were made or required to be made by
organizations that were not exempt from tax under
section 501 of the Internal Revenue Code of 1986.
(iv) The fact that a plan makes an election under
clause (i)(II) does not imply that the plan was not a
multiemployer plan prior to the date of the election or
would not be a multiemployer plan without regard to the
election.
(v)(I) No later than 30 days before an election is
made under this subparagraph, the plan administrator
shall provide notice of the pending election to each
plan participant and beneficiary, each labor
organization representing such participants or
beneficiaries, and each employer that has an obligation
to contribute to the plan, describing the principal
differences between the guarantee programs under title
IV and the benefit restrictions under this title for
single employer and multiemployer plans, along with
such other information as the plan administrator
chooses to include.
(II) Within 180 days after the date of enactment of
the Pension Protection Act of 2006, the Secretary shall
prescribe a model notice under this clause.
(III) A plan administrator's failure to provide the
notice required under this subparagraph shall be
treated for purposes of section 502(c)(2) as a failure
or refusal by the plan administrator to file the annual
report required to be filed with the Secretary under
section 101(b)(1).
(vi) A plan is described in this clause if it is a
plan sponsored by an organization which is described in
section 501(c)(5) of the Internal Revenue Code of 1986
and exempt from tax under section 501(a) of such Code
and which was established in Chicago, Illinois, on
August 12, 1881.
(vii) For purposes of this Act and the Internal Revenue Code
of 1986, a plan making an election under this subparagraph
shall be treated as maintained pursuant to a collective
bargaining agreement if a collective bargaining agreement,
expressly or otherwise, provides for or permits employer
contributions to the plan by one or more employers that are
signatory to such agreement, or participation in the plan by
one or more employees of an employer that is signatory to such
agreement, regardless of whether the plan was created,
established, or maintained for such employees by virtue of
another document that is not a collective bargaining agreement.
(38) The term ``investment manager'' means any fiduciary
(other than a trustee or named fiduciary, as defined in section
402(a)(2))--
(A) who has the power to manage, acquire, or dispose
of any asset of a plan;
(B) who (i) is registered as an investment adviser
under the Investment Advisers Act of 1940; (ii) is not
registered as an investment adviser under such Act by
reason of paragraph (1) of section 203A(a) of such Act,
is registered as an investment adviser under the laws
of the State (referred to in such paragraph (1)) in
which it maintains its principal office and place of
business, and, at the time the fiduciary last filed the
registration form most recently filed by the fiduciary
with such State in order to maintain the fiduciary's
registration under the laws of such State, also filed a
copy of such form with the Secretary; (iii) is a bank,
as defined in that Act; or (iv) is an insurance company
qualified to perform services described in subparagraph
(A) under the laws of more than one State; and
(C) has acknowledged in writing that he is a
fiduciary with respect to the plan.
(39) The terms ``plan year'' and ``fiscal year of the plan''
mean, with respect to a plan, the calendar, policy, or fiscal
year on which the records of the plan are kept.
(40)(A) The term ``multiple employer welfare arrangement''
means an employee welfare benefit plan, or any other
arrangement (other than an employee welfare benefit plan),
which is established or maintained for the purpose of offering
or providing any benefit described in paragraph (1) to the
employees of two or more employers (including one or more self-
employed individuals), or to their beneficiaries, except that
such term does not include any such plan or other arrangement
which is established or maintained--
(i) under or pursuant to one or more agreements which
the Secretary finds to be collective bargaining
agreements,
(ii) by a rural electric cooperative, or
(iii) by a rural telephone cooperative association.
(B) For purposes of this paragraph--
(i) two or more trades or businesses, whether or not
incorporated, shall be deemed a single employer if such
trades or businesses are within the same control group,
(ii) the term ``control group'' means a group of
trades or businesses under common control,
(iii) the determination of whether a trade or
business is under ``common control'' with another trade
or business shall be determined under regulations of
the Secretary applying principles similar to the
principles applied in determining whether employees of
two or more trades or businesses are treated as
employed by a single employer under section 4001(b),
except that, for purposes of this paragraph, common
control shall not be based on an interest of less than
25 percent,
(iv) the term ``rural electric cooperative'' means--
(I) any organization which is exempt from tax
under section 501(a) of the Internal Revenue
Code of 1986 and which is engaged primarily in
providing electric service on a mutual or
cooperative basis, and
(II) any organization described in paragraph
(4) or (6) of section 501(c) of the Internal
Revenue Code of 1986 which is exempt from tax
under section 501(a) of such Code and at least
80 percent of the members of which are
organizations described in subclause (I), and
(v) the term ``rural telephone cooperative
association'' means an organization described in
paragraph (4) or (6) of section 501(c) of the Internal
Revenue Code of 1986 which is exempt from tax under
section 501(a) of such Code and at least 80 percent of
the members of which are organizations engaged
primarily in providing telephone service to rural areas
of the United States on a mutual, cooperative, or other
basis.
(41) Single-employer plan.--The term ``single-employer plan''
means an employee benefit plan other than a multiemployer plan.
(42) the term ``plan assets'' means plan assets as defined by
such regulations as the Secretary may prescribe, except that
under such regulations the assets of any entity shall not be
treated as plan assets if, immediately after the most recent
acquisition of any equity interest in the entity, less than 25
percent of the total value of each class of equity interest in
the entity is held by benefit plan investors. For purposes of
determinations pursuant to this paragraph, the value of any
equity interest held by a person (other than such a benefit
plan investor) who has discretionary authority or control with
respect to the assets of the entity or any person who provides
investment advice for a fee (direct or indirect) with respect
to such assets, or any affiliate of such a person, shall be
disregarded for purposes of calculating the 25 percent
threshold. An entity shall be considered to hold plan assets
only to the extent of the percentage of the equity interest
held by benefit plan investors. For purposes of this paragraph,
the term ``benefit plan investor'' means an employee benefit
plan subject to part 4, any plan to which section 4975 of the
Internal Revenue Code of 1986 applies, and any entity whose
underlying assets include plan assets by reason of a plan's
investment in such entity.
(43) Pooled employer plan.--
(A) In general.--The term ``pooled employer
plan'' means a plan--
(i) which is an individual account
plan established or maintained for the
purpose of providing benefits to the
employees of 2 or more employers;
(ii) which is a plan described in
section 401(a) of the Internal Revenue
Code of 1986 which includes a trust
exempt from tax under section 501(a) of
such Code, a plan that consists of
annuity contracts described in section
403(b) of such Code, or a plan that
consists of individual retirement
accounts described in section 408 of
such Code (including by reason of
subsection (c) thereof); and
(iii) the terms of which meet the
requirements of subparagraph (B).
Such term shall not include a plan maintained
by employers which have a common interest other
than having adopted the plan, but such term
shall include any plan (other than a plan
excepted from the application of this title by
section 4(b)(2)) maintained for the benefit of
the employees of more than 1 employer that
consists of annuity contracts described in
section 403(b) of such Code and that meets the
requirements of subparagraph (B) of section
413(e)(1) of such Code.
(B) Requirements for plan terms.--The
requirements of this subparagraph are met with
respect to any plan if the terms of the plan--
(i) designate a pooled plan provider
and provide that the pooled plan
provider is a named fiduciary of the
plan;
(ii) designate a named fiduciary
(other than an employer in the plan) to
be responsible for collecting
contributions to the plan and require
such fiduciary to implement written
contribution collection procedures that
are reasonable, diligent, and
systematic;
(iii) provide that each employer in
the plan retains fiduciary
responsibility for--
(I) the selection and
monitoring in accordance with
section 404(a) of the person
designated as the pooled plan
provider and any other person
who, in addition to the pooled
plan provider, is designated as
a named fiduciary of the plan;
and
(II) to the extent not
otherwise delegated to another
fiduciary by the pooled plan
provider and subject to the
provisions of section 404(c),
the investment and management
of the portion of the plan's
assets attributable to the
employees of the employer (or
beneficiaries of such
employees);
(iv) provide that employers in the
plan, and participants and
beneficiaries, are not subject to
unreasonable restrictions, fees, or
penalties with regard to ceasing
participation, receipt of
distributions, or otherwise
transferring assets of the plan in
accordance with section 208 or
paragraph (44)(C)(i)(II);
(v) require--
(I) the pooled plan provider
to provide to employers in the
plan any disclosures or other
information which the Secretary
may require, including any
disclosures or other
information to facilitate the
selection or any monitoring of
the pooled plan provider by
employers in the plan; and
(II) each employer in the
plan to take such actions as
the Secretary or the pooled
plan provider determines are
necessary to administer the
plan or for the plan to meet
any requirement applicable
under this Act or the Internal
Revenue Code of 1986 to a plan
described in section 401(a) of
such Code, a plan that consists
of annuity contracts described
in section 403(b) of such Code,
or to a plan that consists of
individual retirement accounts
described in section 408 of
such Code (including by reason
of subsection (c) thereof),
whichever is applicable,
including providing any
disclosures or other
information which the Secretary
may require or which the pooled
plan provider otherwise
determines are necessary to
administer the plan or to allow
the plan to meet such
requirements; and
(vi) provide that any disclosure or
other information required to be
provided under clause (v) may be
provided in electronic form and will be
designed to ensure only reasonable
costs are imposed on pooled plan
providers and employers in the plan.
(C) Exceptions.--The term ``pooled employer
plan'' does not include--
(i) a multiemployer plan; or
(ii) a plan established before the
date of the enactment of the Setting
Every Community Up for Retirement
Enhancement Act of 2019 unless the plan
administrator elects that the plan will
be treated as a pooled employer plan
and the plan meets the requirements of
this title applicable to a pooled
employer plan established on or after
such date.
(D) Treatment of employers as plan
sponsors.--Except with respect to the
administrative duties of the pooled plan
provider described in paragraph (44)(A)(i),
each employer in a pooled employer plan shall
be treated as the plan sponsor with respect to
the portion of the plan attributable to
employees of such employer (or beneficiaries of
such employees).
(44) Pooled plan provider.--
(A) In general.--The term ``pooled plan
provider'' means a person who--
(i) is designated by the terms of a
pooled employer plan as a named
fiduciary, as the plan administrator,
and as the person responsible for the
performance of all administrative
duties (including conducting proper
testing with respect to the plan and
the employees of each employer in the
plan) which are reasonably necessary to
ensure that--
(I) the plan meets any
requirement applicable under
this Act or the Internal
Revenue Code of 1986 to a plan
described in section 401(a) of
such Code, a plan that consists
of annuity contracts described
in section 403(b) of such Code,
or to a plan that consists of
individual retirement accounts
described in section 408 of
such Code (including by reason
of subsection (c) thereof),
whichever is applicable; and
(II) each employer in the
plan takes such actions as the
Secretary or pooled plan
provider determines are
necessary for the plan to meet
the requirements described in
subclause (I), including
providing the disclosures and
information described in
paragraph (43)(B)(v)(II);
(ii) registers as a pooled plan
provider with the Secretary, and
provides to the Secretary such other
information as the Secretary may
require, before beginning operations as
a pooled plan provider;
(iii) acknowledges in writing that
such person is a named fiduciary, and
the plan administrator, with respect to
the pooled employer plan; and
(iv) is responsible for ensuring that
all persons who handle assets of, or
who are fiduciaries of, the pooled
employer plan are bonded in accordance
with section 412.
(B) Audits, examinations and
investigations.--The Secretary may perform
audits, examinations, and investigations of
pooled plan providers as may be necessary to
enforce and carry out the purposes of this
paragraph and paragraph (43).
(C) Guidance.--The Secretary shall issue such
guidance as the Secretary determines
appropriate to carry out this paragraph and
paragraph (43), including guidance--
(i) to identify the administrative
duties and other actions required to be
performed by a pooled plan provider
under either such paragraph; and
(ii) which requires in appropriate
cases that if an employer in the plan
fails to take the actions required
under subparagraph (A)(i)(II)--
(I) the assets of the plan
attributable to employees of
such employer (or beneficiaries
of such employees) are
transferred to a plan
maintained only by such
employer (or its successor), to
an eligible retirement plan as
defined in section 402(c)(8)(B)
of the Internal Revenue Code of
1986 for each individual whose
account is transferred, or to
any other arrangement that the
Secretary determines is
appropriate in such guidance;
and
(II) such employer (and not
the plan with respect to which
the failure occurred or any
other employer in such plan)
shall, except to the extent
provided in such guidance, be
liable for any liabilities with
respect to such plan
attributable to employees of
such employer (or beneficiaries
of such employees).
The Secretary shall take into account
under clause (ii) whether the failure
of an employer or pooled plan provider
to provide any disclosures or other
information, or to take any other
action, necessary to administer a plan
or to allow a plan to meet requirements
described in subparagraph (A)(i)(II)
has continued over a period of time
that demonstrates a lack of commitment
to compliance. The Secretary may waive
the requirements of subclause (ii)(I)
in appropriate circumstances if the
Secretary determines it is in the best
interests of the employees of the
employer referred to in such clause
(and the beneficiaries of such
employees) to retain the assets in the
plan with respect to which the
employer's failure occurred.
(D) Good faith compliance with law before
guidance.--An employer or pooled plan provider
shall not be treated as failing to meet a
requirement of guidance issued by the Secretary
under subparagraph (C) if, before the issuance
of such guidance, the employer or pooled plan
provider complies in good faith with a
reasonable interpretation of the provisions of
this paragraph, or paragraph (43), to which
such guidance relates.
(E) Aggregation rules.--For purposes of this
paragraph, in determining whether a person
meets the requirements of this paragraph to be
a pooled plan provider with respect to any
plan, all persons who perform services for the
plan and who are treated as a single employer
under subsection (b), (c), (m), or (o) of
section 414 of the Internal Revenue Code of
1986 shall be treated as one person.
(45) Pension-linked emergency savings account.--The
term ``pension-linked emergency savings account'' means
a short-term savings account established and maintained
as part of an individual account plan, in accordance
with section 801, on behalf of an eligible participant
(as such term is defined in section 801(b)) that--
(A) is a designated Roth account (within the
meaning of section 402A of the Internal Revenue
Code of 1986) and accepts only participant
contributions, as described in section
801(d)(1)(A), which are designated Roth
contributions subject to the rules of section
402A(e) of such Code; and
(B) meets the requirements of part 8 of
subtitle B.
* * * * * * *
Subtitle B--Regulatory Provisions
* * * * * * *
Part 7--Group Health Plan Requirements
* * * * * * *
Subpart C--General Provisions
* * * * * * *
SEC. 736. RULES APPLICABLE TO EMPLOYEE WELFARE BENEFIT PLANS
ESTABLISHED AND MAINTAINED BY A GROUP OR
ASSOCIATION OF EMPLOYERS.
(a) Premium Rates for a Group or Association of Employers.--
(1)(A) In the case of an employee welfare benefit
plan established and maintained by a group or
association of employers described in section 3(5)(B),
such plan may, to the extent not prohibited under State
law--
(i) establish base premium rates formed on an
actuarially sound, modified community rating
methodology that considers the pooling of all
plan participant claims; and
(ii) utilize the specific risk profile of
each employer member of such group or
association to determine contribution rates for
each such employer member's share of a premium
by actuarially adjusting above or below the
established base premium rates.
(B) For purposes of paragraph (1), the term
``employer member'' means--
(i) an employer who is a member of such group
or association of employers and employs at
least 1 common law employee; or
(ii) a group made up solely of self-employed
individuals, within which all of the self-
employed individual members of such group or
association are aggregated together as a single
employer member group, provided the group
includes at least 20 self-employed individual
members.
(2) In the event a group or association is made up
solely of self-employed individuals (and no employers
with at least 1 common law employee are members of such
group or association), the employee welfare benefit
plan established by such group or association shall--
(A) treat all self-employed individuals who
are members of such group or association as a
single risk pool;
(B) pool all plan participant claims; and
(C) charge each plan participant the same
premium rate.
(b) Discrimination and Pre-existing Condition Protections.--
An employee welfare benefit plan established and maintained by
a group or association of employers described in section
3(5)(B) shall be prohibited from--
(1) establishing any rule for eligibility (including
continued eligibility) of any individual (including an
employee of an employer member or a self-employed
individual, or a dependent of such employee or self-
employed individual) to enroll for benefits under the
terms of the plan that discriminates based on any
health status-related factor that relates to such
individual (consistent with the rules under section
702(a)(1));
(2) requiring an individual (including an employee of
an employer member or a self-employed individual, or a
dependent of such employee or self-employed
individual), as a condition of enrollment or continued
enrollment under the plan, to pay a premium or
contribution that is greater than the premium or
contribution for a similarly situated individual
enrolled in the plan based on any health status-related
factor that relates to such individual (consistent with
the rules under section 702(b)(1)); and
(3) denying coverage under such plan on the basis of
a pre-existing condition (consistent with the rules
under section 2704 of the Public Health Service Act).
* * * * * * *
MINORITY VIEWS
Introduction
Committee Democrats oppose H.R. 2528, the Association
Health Plans Act. This legislation would put comprehensive and
affordable health care coverage for small businesses and
workers at risk, create loopholes that undermine critical
consumer protections, and raise costs across the broader health
insurance market. Under current law, small groups and
individuals purchasing health coverage through the Marketplace
are generally subject to specific protections. H.R. 2528
unravels these protections by allowing association health plans
(AHPs) to operate under rules that normally apply only to large
groups. Expanding AHPs, as proposed under H.R. 2528, will do
little to alleviate the challenges facing small businesses and
the self-employed. In fact, it would cause substantial harm to
far more consumers by making coverage more expensive for many
and entirely out of reach for some. For this reason, H.R. 2528
is opposed by more than 25 leading consumer and patient groups,
including the Leukemia & Lymphoma Society, American Cancer
Society Action Network, Susan G. Komen, American Heart
Association, and American Lung Association.\1\ Committee
Democrats unanimously reject this harmful legislation.
---------------------------------------------------------------------------
\1\Statement on Behalf of Members of the Partnership to Protect
Coverage House Committee on Education and the Workforce Health,
Employment, Labor, and Pensions Subcommittee Hearing on: ``A Healthy
Workforce: Expanding Access and Affordability in Employer-Sponsored
Health Care'', H. Comm. on Educ. & Workforce (Apr. 2, 2025) (on file
with Committee).
---------------------------------------------------------------------------
Progress Made Under the Affordable Care Act and the Inflation Reduction
Act
Before the Affordable Care Act\2\ (ACA), workers often had
limited options for obtaining affordable health coverage.\3\
People with preexisting conditions were particularly
disadvantaged because they could be charged higher rates or
denied coverage altogether in the individual market. Small
businesses employing women or workers with chronic or high-cost
illnesses could be charged higher premiums, often making
coverage unaffordable. Those who could afford to buy coverage
in the individual and small group market often found their
insurance did not cover vital services, such as behavioral
health or maternity care.\4\
---------------------------------------------------------------------------
\2\Pub. L. No. 111-148 (2010).
\3\Sara R. Collins et al., How the Affordable Care Act Has Improved
Americans' Ability to Buy Health Insurance on Their Own, Commonwealth
Fund (Feb. 1, 2017), https://www.commonwealthfund.org/sites/default/
files/documents/__media_files_publications_issue_
brief_2017_feb_1931_collins_biennial_survey_2016_ib.pdf.
\4\Essential Health Benefits Under Threat, Ctr. on Budget & Pol'y
Priorities, https://www.cbpp.org/essential-health-benefits-under-threat
(last visited July 15, 2025).
---------------------------------------------------------------------------
The ACA took steps to level the playing field--establishing
safeguards for workers and employers alike. Not only did the
ACA create Marketplaces where individuals, self-employed
people, and families could access affordable health coverage,
but the law has also protected workers and businesses in the
small group market from unfair practices.\5\ In addition to
instituting crucial consumer protections, the ACA has led to
historic improvements in the number of people with health
coverage.\6\ During the 117th Congress, Democrats took bold
action to build upon this progress and further improve
affordability. The American Rescue Plan Act (ARPA)\7\ and the
Inflation Reduction Act (IRA)\8\ strengthened the ACA's advance
premium tax credits and eliminated the subsidy ``cliff'' for
individuals earning over 400 percent of the Federal Poverty
Level through 2025. Thanks to these reforms, a record 24.3
million people signed up for coverage through Healthcare.gov
and State-Based Marketplaces during the Open Enrollment Period
for 2025.\9\
---------------------------------------------------------------------------
\5\Nicole Rapfogel et al., 10 Ways the ACA Has Improved Health Care
in the Past Decade, Ctr. for Amer. Progress (Mar. 23, 2020), https://
www.americanprogress.org/article/10-ways-aca-improved-health-care-past-
decade/.
\6\Lisa Bunch et al., While the Share of Uninsured Remained at
About 8% in 2023, Rates Varied by Age and Poverty Level, U.S. Census
Bureau (Sept. 10, 2024), https://www.census.gov/library/stories/2024/
09/health-insurance-coverage.html.
\7\Pub. L. No. 117-2 (2021).
\8\Pub. L. No. 117-169 (2022).
\9\Jared Ortaliza et al., Enrollment Growth in the ACA
Marketplaces, Kaiser Family Found. (Apr. 2, 2025), https://www.kff.org/
policy-watch/enrollment-growth-in-the-aca-marketplaces/.
---------------------------------------------------------------------------
H.R. 2528 Erodes the ACA's Protections
Under current law, coverage offered through a group or
association to individuals or small employers must generally
comply with the patient protections of the ACA and state
insurance law.\10\ These protections include, among others:
coverage of essential health benefits, prohibition against
medical underwriting, minimum medical loss ratios, and
requiring age-adjusted community rating. Large groups that
offer health coverage, such as a large employer-sponsored plan,
are required to comply with many--but not all--of these
requirements. H.R. 2528 changes current law by allowing
businesses and groups of self-employed people to band together
and be treated as a ``large group'' under federal law. By
permitting an AHP to be a large group, H.R. 2528 allows AHPs to
rate premiums on factors that would otherwise be impermissible,
such as gender, location, or occupation, which could raise
costs for certain workers. Further, under the large group
rules, AHPs would not be required to provide Essential Health
Benefits and could therefore exclude coverage necessary for
illnesses such as cancer.\11\
---------------------------------------------------------------------------
\10\29 U.S.C. Sec. 1144(b)(6); Ctrs. for Medicare & Medicaid
Servs., Application of Individual and Group Market Requirements under
Title XXVII of the Public Health Service Act when Insurance Coverage Is
Sold to, or through, Associations (Sept. 1, 2011), https://www.cms.gov/
CCIIO/
Resources/Files/Downloads/association_coverage_9_1_2011.pdf.
\11\A Healthy Workforce: Expanding Access and Affordability in
Employer-Sponsored Health Care: Hearing Before the Subcomm. on Health,
Emp't, Lab., and Pensions of the H. Comm. on Educ. & Workforce, 118th
Cong. 4 (2025) (statement of Bethany Lily, Executive Director, Public
Policy, The Leukemia & Lymphoma Society).
---------------------------------------------------------------------------
H.R. 2528 Creates Market Fragmentation and Raises Health Care Costs
Expansion of AHPs has been central to the Republican health
care agenda for decades, including in the 118th Congress\12\
and in past Republican attempts to repeal the ACA.\13\ Experts
have consistently warned that allowing AHPs to instead be
subject to different requirements--which is antithetical to the
foundational principle of the ACA that no one gets left
behind--would fragment the health insurance market. Those
enrolled in AHPs could save money, so long as everyone remains
healthy. If someone gets sick or incurs high medical expenses,
an AHP would then face financial pressure and rejoin the
traditional market. This dynamic, in turn, raises costs for
those outside of the AHP. According to the American Academy of
Actuaries, allowing AHPs to operate under different rules could
result in adverse selection that raises costs throughout the
insurance pool and creates a market in which higher-cost
groups--namely, those that are generally sicker or older--
``could find it more difficult to obtain coverage.''\14\
Similarly, the Congressional Budget Office (CBO) has stated
that ``the primary factor driving lower premiums for AHPs is
the ability to price premiums on the basis of each
association's expected health care spending and thereby attract
employers with relatively low-risk employees and avoid those
with higher-risk employees.''\15\
---------------------------------------------------------------------------
\12\Association Health Plans Act, H.R. 2868, 118th Cong. (2023).
\13\See, e.g., Affordable Health Care Act of 1999, H.R. 1136, 106th
Cong. (1999); Small Business Health Fairness Act of 2017, H.R. 1101,
115th Cong. (2017).
\14\Am. Acad. of Actuaries, Issue Brief: Association Health Plans
(Feb. 2017), http://www.actuary.org/content/association-health-plans-0.
\15\Cong. Budget Off, How CBO and JCT Analyzed Coverage Effects of
New Rules for Association Health Plans and Short-Term Plans 5 (Jan.
2019), https://www.cbo.gov/system/files/2019-01/54915-
New_Rules_for_AHPs_STPs.pdf.
---------------------------------------------------------------------------
As the consumer group Families USA informed the Committee
in comments submitted for the June 25, 2025, Markup of H.R.
2528:
[Association health plans]. . . do not evenly spread
out the cost of insuring less healthy individuals like
traditional insurers do. As a result, the ``cost-
savings''' that supporters of AHPs. . . . claim as a
benefit are actually rooted in their reliance on
discriminatory practices that push families who
regularly utilize their insurance coverage for things
like the treatment of chronic conditions into
traditional, comprehensive insurance which increases
costs for the entire market.\16\
---------------------------------------------------------------------------
\16\Families USA, Statement for the Record House Committee on
Education and the Workforce Full Committee Markup on Bills Including:
H.R. 2528, Association Health Plans Act, H.R. 2571, Self-Insurance
Protection Act (June 25, 2025) (on file with Committee).
---------------------------------------------------------------------------
H.R. 2528 Threatens Comprehensive, Affordable Coverage
Under H.R. 2528, AHPs could evade benefit standards and
consumer protections, threatening the quality of coverage
provided to their own enrollees. As a result, enrollees run the
risk of--potentially unknowingly--losing out on comprehensive
care that would otherwise be guaranteed under the ACA. While
the bill applies some superficial consumer protections to AHPs
(e.g., nominal protections against discrimination based on
preexisting conditions), it creates other large loopholes that
leave consumers vulnerable.
Disturbingly, this legislation explicitly authorizes AHPs
to set premiums based on the ``specific risk profile'' of
employer members, potentially enabling discrimination against
certain populations by charging higher premiums to groups based
on their age, gender, or other factors. Moreover, even if
premiums are not set directly on health-related factors by an
association, under this legislation AHPs could take into
account numerous other factors that raise costs for people who
are older or have preexisting conditions.\17\ As a result, this
bill effectively invites AHPs to charge workers with more
expensive health needs far higher premiums--if those workers
could even afford to participate in the associations at all.
---------------------------------------------------------------------------
\17\See Sarah Lueck, Association Health Plan Expansion Likely to
Hurt Consumers, State Insurance Markets, Ctr. on Budget & Pol'y
Priorities (Mar. 7, 2019), https://www.cbpp.org/research/health/
association-health-plan-expansion-likely-to-hurt-consumers-state-
insurance-markets.
---------------------------------------------------------------------------
Allowing insurers and health plans to avoid covering needed
benefits is a longstanding tenet of Republicans' approach to
health care.\18\ H.R. 2528 is no different. Even though
coverage of essential health benefits being both popular and
necessary,\19\ under the legislation, AHPs would be exempt from
this foundational protection of the ACA. As a result, AHPs
could exclude certain categories of coverage, such as maternity
care, mental health, or substance use disorder, to dissuade
certain groups or individuals from enrolling. Reducing benefit
levels or avoiding the costs of providing comprehensive
benefits can reduce costs in the short-term but will ultimately
negatively impact consumers and worsen health outcomes for
people who need coverage the most. Individuals enrolled in AHPs
could be shocked to find they do not have access to the care
they need or the financial security they expected.
---------------------------------------------------------------------------
\18\See, e.g., Lydia Mitts et al., House Republicans Gut
Protections for Pre-Existing Conditions in Latest Proposal, Families
USA (Mar. 26, 2017), https://familiesusa.org/resources/house-
republicans-gut-protections-for-pre-existing-conditions-in-latest-
proposal/.
\19\Dania Palanker, Eliminating Essential Health Benefits Will
Shift Financial Risk Back to Consumers, Commonwealth Fund (Mar. 24,
2017), https://www.commonwealthfund.org/blog/2017/eliminating-
essential-health-benefits-will-shift-financial-risk-back-consumers.
---------------------------------------------------------------------------
H.R. 2528 Gambles With the Financial Security of Workers, Employers,
and Providers
H.R. 2528 does not include protections necessary to prevent
fraud and mismanagement. This is dangerous for consumers and
employers who participate in these arrangements, as well as the
doctors, health centers, and hospitals who may not receive
reimbursement for the medical care they provide.
The history of multiple employer welfare arrangements
(MEWAs) offers a sobering warning for the financial risks posed
by the proliferation of AHPs. H.R. 2528 allows AHPs to form
under limited regulation and oversight, hearkening back to the
time when MEWAs also enjoyed limited regulation and gambled
with the financial security of both workers and employers.\20\
In 2001, Sunkist Growers, Inc., a California-based MEWA that
covered 23,000 people, became insolvent, leaving behind
approximately $11 million in unpaid claims.\21\ Similarly, New
Jersey's Coalition of Automotive Retailers became insolvent in
2002, leaving 20,000 individuals without coverage and $15
million in unpaid claims.\22\
---------------------------------------------------------------------------
\20\U.S. Dept. of Lab., MEWAs Multiple Employer Welfare
Arrangements under the Employee Retirement Income Security Act (ERISA):
A Guide to Federal and State Regulation 3 (Apr. 2022), https://
www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-
center/publications/
mewa-under-erisa-a-guide-to-federal-and-state-regulation.pdf
(``Recognizing that it was both appropriate and necessary for States to
be able to establish, apply and enforce State insurance laws with
respect to MEWAs, the U.S. Congress amended ERISA in 1983, as part of
Public Law 97-473, to provide an exception to ERISA's broad preemption
provisions for the regulation of MEWAs under State insurance laws.'').
\21\Mila Kofman et al., MEWAs: The Threat of Plan Insolvency and
Other Challenges, Commonwealth Fund (Mar. 2004), https://
www.commonwealthfund.org/sites/default/files/
documents/
__media_files_publications_issue_brief_2004_mar_mewas__the_threat_of_pla
n_
insolvency_and_other_challenges_kofman_mewas_pdf.pdf.
\22\Id.
---------------------------------------------------------------------------
Unfortunately, MEWAs continue to face financial challenges
and heightened risk of fraud to this day. The Department of
Labor (the Department) routinely documents investigations and
enforcement actions against MEWAs that have committed
violations of ERISA and failed to pay promised benefits.\23\ In
2023, the Department announced that health plan participants,
employers, and medical providers harmed by a MEWA operating in
36 states would begin to finally receive payments related to
more than $54 million in unpaid health claims.\24\
Unfortunately, despite these enforcement efforts, victims are
often not made whole, leaving workers, employers, and health
care providers to absorb financial losses caused by fraudulent
and mismanaged MEWAs.\25\ By expanding AHPs without further
guardrails to prevent these harms, H.R. 2528 would lead to
similar harms on a potentially even larger scale.
---------------------------------------------------------------------------
\23\Christine Monahan, Updates from the MEWA Files: The Good, the
Bad, and the Ugly of Federal Enforcement Efforts, CHIRblog (Dec. 19,
2019), https://chirblog.org/mewa-files-part-3-good-bad-ugly/.
\24\Press Release, U.S. Dep't of Labor, Federal Court Approves Plan
To Distribute Assets to Participants Harmed by Underfunded Group Health
Plan Arrangement Operating in 36 States (May 1, 2023), https://
www.dol.gov/newsroom/releases/ebsa/ebsa20230501.
\25\Monahan, supra note 23.
---------------------------------------------------------------------------
Rather than Expand AHPs, Congress Must Extend the Enhanced ACA Tax
Credits
The improvements to the ACA's premium tax credits under
ARPA and the IRA have been a tremendous benefit to consumers,
including self-employed individuals and small businesses. By
lowering consumers' premiums and eliminating the subsidy
``cliff'' for individuals earning 400 percent or more of the
federal poverty level, high-quality coverage is more affordable
than ever.
Figure 1. Improved Affordability of Health Insurance Under the American
Rescue Plan Act and Inflation Reduction Act\26\
---------------------------------------------------------------------------
\26\I.R.C. Sec. 36B.
Marketplace Premiums Under the ACA
----------------------------------------------------------------------------------------------------------------
Initial Premium Final Premium
Household Income (FPL) Percentage Percentage
----------------------------------------------------------------------------------------------------------------
Up to 133%.................................................... 2.0 2.0
133% to 150%.................................................. 3.0 4.0
150% to 200%.................................................. 4.0 6.3
200% to 250%.................................................. 6.3 8.05
250% to 300%.................................................. 8.05 9.5
300% to 400%.................................................. 9.5 9.5
----------------------------------------------------------------------------------------------------------------
Marketplace Premiums Under ARPA and IRA
----------------------------------------------------------------------------------------------------------------
Initial Premium Final Premium
Household Income (FPL) Percentage Percentage
----------------------------------------------------------------------------------------------------------------
Up to 150%.................................................... 0.0 0.0
150% to 200%.................................................. 0.0 2.0
200% to 250%.................................................. 2.0 4.0
250% to 300%.................................................. 4.0 6.0
300% to 400%.................................................. 6.0 8.5
400% and up................................................... 8.5% 8.5
----------------------------------------------------------------------------------------------------------------
During the 2025 Open Enrollment Period, a record 24.3
million people signed up for coverage through the ACA
Marketplaces.\27\ Despite the progress in expanding access to
affordable health coverage, the first regulatory action taken
by the Centers for Medicare & Medicaid Services (CMS) under the
second term of the Trump Administration with respect to the ACA
was promulgation of a Final Rule cutting ACA Marketplace
coverage.\28\ This Final Rule restricts coverage, raises costs,
imposes paperwork requirements, and, by the Trump
Administration's own estimates, will lead to up to 1.8 million
people losing their coverage in 2026.\29\
---------------------------------------------------------------------------
\27\Ortaliza et al, supra note 9.
\28\Patient Protection and Affordable Care Act; Marketplace
Integrity and Affordability, 90 Fed. Reg. 27074, 27213 (June 25, 2025),
https://www.federalregister.gov/documents/2025/06/25/2025/11606/
patient-protection-and-affordable-care-act-marketplace-integrity-and-
affordability.
\29\Id at 27215.
---------------------------------------------------------------------------
Further, President Trump and Congressional Republicans have
repeatedly refused to extend the enhanced tax credits prior to
their expiration this year, which will result in nearly four
million people losing health coverage\30\ and millions more
Americans seeing their premiums, on average, more than
double.\31\ The Center on Budget and Policy Priorities
estimates that, as a result of the inaction, ``about 22 million
people, including 3 million small business owners and self-
employed workers, will see their health coverage costs
skyrocket or lose coverage altogether in 2026. . .''\32\ On top
of this inaction, the policies included in ``Big, Ugly Law''
are already set to unravel many of the coverage gains made over
the past decade and will cost approximately 51,000 Americans
their lives per year.\33\ According to the Congressional Budget
Office (CBO), the law will take health coverage away from
approximately 10 million people.\34\
---------------------------------------------------------------------------
\30\Cong. Budget Off., The Estimated Effects of Enacting Selected
Health Coverage Policies on the Federal Budget and on the Number of
People With Health Insurance (Sept. 18, 2025), https://www.cbo.gov/
publication/61734.
\31\Justin Lo et al., ACA Marketplace Premium Payments Would More
than Double on Average Next Year if Enhanced Premium Tax Credits
Expire, KFF (Sept. 30, 2025), https://www.kff.org/affordable-care-act/
aca-marketplace-premium-payments-would-more-than-double-on-average-
next-year-if-enhanced-premium-tax-credits-expire/.
\32\Ctr. on Budget & Pol'y Priorities, By the Numbers: Harmful
Republican Megabill Will Take Health Coverage Away From Millions of
People and Raise Families' Health Care Costs 2 (June 6, 2025), https://
www.cbpp.org/sites/default/files/5-19-25health-bythenumbers.pdf.
\33\Letter from Rachel M. Wern et al. to Sen. Ron Wyden and Sen.
Bernie Sanders (June 3, 2025), https://ldi.upenn.edu/our-work/research-
updates/research-memo-projected-mortality-impacts-of-the-budget-
reconciliation-bill/.
\34\Cong. Budget Off., Estimate of Annual Changes in the Number of
People Without Health Insurance Under Title VII, P.L. 119-21 (Aug. 11,
2025), https://www.cbo.gov/system/files/2025-08/61367-Uninsured-
Data.xlsx.
---------------------------------------------------------------------------
Rather than continue to undermine the Marketplace through a
poorly conceived proposal to expand AHPs, Republicans should
join Democrats in extending the IRA's enhanced subsidies and
offer meaningful financial relief that will make coverage
affordable.
Conclusion
H.R. 2528, the Association Health Plans Act, would erode
protections provided by the ACA and leave small businesses and
their workers vulnerable to unaffordable health coverage and
fewer benefits. The expansion of AHPs under the legislation
will threaten affordable coverage for those outside of the
associations while failing to provide comprehensive, reliable
coverage to their own enrollees. This misguided legislation is
a recycled attack on affordable health care and represents yet
another effort to roll back the historic progress made under
the ACA. It continues an extreme Republican health agenda that
would leave millions without quality health insurance.
For the reasons stated above, Committee Democrats
unanimously opposed H.R. 2528 when the Committee on Education
and Workforce considered it on June 25, 2025. We urge the House
of Representatives to do the same.
Robert C. ``Bobby'' Scott,
Ranking Member
Joe Courtney,
Frederica S. Wilson,
Suzanne Bonamici,
Mark DeSaulnier,
Adelita Grijalva,
Members of Congress.
[all]