History of Association Health Plans

Association Health Plans (AHPs) have existed for decades, both multi-state and intra-state. However, while the Employee Retirement Income Security Act of 1974 (ERISA) preempts state regulations for most corporate and union health plans, it does not preempt AHPs - a critical difference that has led to the relative extinction of AHPs.

As state regulations and mandates have proliferated in the last decade, AHPs have become increasingly difficult to operate. In 1990, there were more than 1,000 AHPs. Today, there are fewer than 200.

The primary obstacle to creating and running an AHP today is state regulation.

The simplest way to allow AHPs to prosper again is to extend ERISA to AHPs, allowing Association Health Plans to operate like a corporate or labor union health plan.

Following is a brief history of the effort to pass AHP legislation, in reverse chronological order from the 108th Congress through 1995.

108th Congress

House Action -- 2003
The Small Business Health Fairness Act of 2003 (H.R. 660), sponsored by Reps. Ernie Fletcher, R-Ky.-6, Cal Dooley, R-Calif.-20, Sam Johnson, R-Texas-3, and Nydia Velazquez, D-N.Y.-12, was introduced in the House Feb. 11, 2003. The bill would authorize the formation and multi-state operation of federally-certified Association Health Plans. AHPs would be regulated under a single set of federally prescribed rules, and permitted exemptions from costly state regulations that large corporate and union health plans already enjoy under the Employee Retirement Income Security Act.

By a vote of 262 to 162, the House passed H.R. 660 on June 19, 2003.
See the roll-call vote on H.R. 660.

House Action -- 2004
The Small Business Health Fairness Act of 2004 (H.R. 4281), sponsored by Reps. Ernie Fletcher, R-Ky.-6, Cal Dooley, R-Calif.-20, Sam Johnson, R-Texas-3, and Nydia Velazquez, D-N.Y.-12, was introduced in the House May 5, 2004. The bill is virtually identical to H.R. 660, which passed the House in June 2003 but stalled in the Senate.

By a vote of 252 to 162, the House passed H.R. 4281 on May 13, 2004.
See the roll-call vote on H.R. 4281.

Senate Action
The Small Business Health Fairness Act of 2003 (S. 545) was introduced in the Senate by Sen. Olympia J. Snowe, R-Maine, on March 6, 2003. The original co-sponsors joining Snowe include Sens. Kit Bond, R-Mo., Jim Talent, R-Mo., John McCain, R-Ariz., and Elizabeth Dole, R-N.C. The bill stalled in the Senate, never coming up for a vote.


106th Congress

After Fawell's retirement, Reps. Jim Talent, R-Mo.-2, and Cal Dooley, D-Calif.-20 introduced AHP legislation in 1999, and the House approved the bill as a component of the PBOR. The Senate passed its equivalent legislation without AHPs, and the conference committee deadlocked in 2000.

105th Congress

In 1997, Rep. Fawell again introduced AHP legislation in the House. At the same time, Sen. Tim Hutchinson, R-Ark., introduced a similar AHP bill in the Senate, with Majority Leader Trent Lott, R-Miss., as a cosponsor. The House bill was added to the Balanced Budget Act and approved by the House. However, the AHP legislation was dropped during the House-Senate conference.

In 1998, the AHP bill was included in the House Republican version of the Patients' Bill of Rights (PBOR) before it passed the House. Then, significant changes were made to the bill in an attempt to stifle opposition from the National Governors Association. However, the Senate never passed PBOR legislation that year.

104th Congress

When Republicans took control of Congress in 1995, Rep. Harris Fawell, R-Il.-13, introduced stand-alone AHP legislation that was approved by the House in 1996 as a portion of the Health Insurance Portability and Accountability Act (HIPAA). However, the AHP legislation was dropped in conference due to opposition from the Clinton Administration.

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