RD285 - 2009 Annual Report on Federal Legislation Pertaining to Association Health Plans - September 2009


Executive Summary:
Under Virginia Code § 2.2-302.1 it is the Commonwealth of Virginia’s official public policy to encourage pooling of health insurance efforts by small businesses, and to support federal legislative efforts that facilitate this pooling, provided that these Association Health Plans (AHPs) remain subject to State Law.

AHPs consist of groups of small firms and businesses that have banded together as trade associations to offer health insurance plans for their members and employees. The associations can be based on professional or trade associations (generally with membership limited to a specific trade or business), or can simply be a broad association for small employers who share common personal interests.

Under current law, AHPs are regulated by the states, even when the coverage is self-funded. Recently, however, there have been efforts in Congress to usurp this regulatory power. In 2009, two bills regarding AHPs (H.R. 2607 and S. 1240) were introduced in Congress that included a clause providing for the federal preemption of state law.

Because all Federal legislative proposals would serve to preempt state regulations, the Virginia Liaison Office has not advocated for any legislation introduced during the 111th Congress regarding AHPs.