Condeluci is director of the Coalition to Protect and Promote Association Health Plans, a group that has promoted AHP proposals for the American Society of Association Executives and many other business groups, such as the National Association of Realtors and the American Farm Bureau Federation.

Related: House committee chair continues fight for association health plans

In the past, AHP critics have argued that helping small employers leave the fully insured market could destabilize that market, by causing employers with younger, healthier workers to shift to the AHPs and leave insurers with employers with older, sicker workers.

Condeluci disagrees with that reasoning.

"The small group market continues to decline, and the status quo is not sustainable," Condeluci said. "Both political parties should want to throw a lifeline to employees of small businesses and self-employed individuals who cannot afford to pay for their health bills due to costly deductibles and copayments."

AHP basics: The Employee Retirement Income Security Act lets self-insured employer health plans operate under federal law.

Self-insured plans can escape state health insurance mandates and some of the federal rules that apply to individual major medical insurance and fully insured small-group health plans.

Small employers in a community can already team up to buy health coverage through associations, but AHP advocates want to make it much easier for small employers and self-employed individuals to join AHPs.

President Donald Trump approved regulations expanding AHP access during his first term. Former President Joe Biden overturned those regulations.

AHP supporters in Congress are now moving toward reviving the expanded AHP access rules

Analysts at the Congressional Budget Office estimated in November that a bill similar to a new House AHP bill could lead to AHPs covering about 600,000 people within a year.

The AHP 2.0 language: Condeluci represents business groups and others that support legislative language that would let small employers join an AHP without necessarily being in the same industry or in the same community.

The language would also ensure that regulators would treat the AHP as a large employer.

The language would prohibit an AHP from denying coverage for people with a pre-existing condition or discriminating against people with health conditions.

It also would impose the Affordable Care Act requirements that already apply to large employer groups, including large self-insured groups, to the AHPs.

Condeluci answered questions about AHP 2.0 and his thoughts about health benefits and AHPs via email. The interview has been edited.

BENEFITSPRO: Why, from your perspective, are the current small-group and individual markets unsustainable?

CHRISTOPHER CONDELUCI: Let's look at the facts: For the 2024 plan year, the deductible for a "bronze" Affordable Care Act individual market plan averaged $7,258 for single coverage and about $16,000 for family coverage, and the benchmark "silver" plan had an average deductible of $5,241 for single and about $11,000 for family coverage.

This means that while it may be affordable for a family of four to purchase a subsidized ACA individual market plan (because premiums are low due to the government subsidy), this family must spend $11,000 to $16,000 out-of-their-own income before any insurance coverage begins.

For small-group market plans, the average deductible was about $2,575 for single and $7,000 for family coverage in 2024, which means — similar to individual market plans — significant out-of-pocket spending must be sustained before any insurance coverage begins.

AHPs, on the other hand — which cover the same type of benefits offered by large employers — offer deductibles that range from a relatively low deductible plan of about $1,000 for single and $2,000 for family coverage to a high-deductible health plan with deductibles ranging from $2,500-$5,000 for single and $4,000-$8,000 for family coverage, with an average deductible of around $1,600 for single and $4,000 for family coverage.

Premiums for AHPs — like large employer plans — are traditionally lower than small-group market plans, and AHPs have broader provider networks relative to both ACA's individual and small-group market plans.

Why promote an AHP proposal now?

The numbers are clear: The small-group market continues to decline, and the status quo is not sustainable.

It should not matter which political party controls Congress or the White House.

Both political parties should want to throw a lifeline to employees of small businesses and self-employed individuals who cannot afford to pay for their health bills due to costly deductibles and copayments.

To this latter point, all eyes are on what Republicans and Democrats will do with the Affordable Care Act enhanced premium subsidies for individual health insurance that are expiring at the end of 2025.

Here's a grand compromise: Republicans should extend the enhanced premium subsidies with, for example, an age-based formula and an income limitation of 600% of the federal poverty level, and Democrats should agree to enact our AHP 2.0 legislation into law.

How are health insurers reacting to AHP proposals now?

I believe that health insurers agree that the small-group and individual markets are problematic due to the exceedingly high out-of-pocket costs that must be paid for before any substantive health coverage kicks in, along with the narrow networks that are inherent to individual and small-group plans.

I think that health insurers believe that health coverage that is regulated like a large employer plan is going to be attractive to more small businesses and their employees, along with self-employed individuals.

In addition, I believe that some health insurers know that they can insure uninsured lives who are currently not in any insurance market in the first place.

Health insurers see the same statistics we see, and they know that a large swath of employees of small businesses do not have any type of health insurance.

If a health insurer under-writes a fully insured large group AHP, many of those small businesses currently not offering health coverage will likely offer coverage to their employees.

That's a coverage gain, and new business for the insurer.

What do you think of the argument that AHPs will destabilize the fully insured group market?

First, there is no verifiable data justifying this claim.

Only theoretical assumptions that have never been corroborated.

For example, AHPs that cover employees of industry-based small employers have been operating for decades now.

And never has there been a study indicating that these industry-based AHPs have adversely affected the insurance markets.

Second, AHPs offer comprehensive coverage relative to individual and small-group market plans, and for employees of small businesses, AHP health coverage is more affordable.

As a result, less-healthy/high-medical utilizers will gravitate toward AHPs based on the AHPs' comprehensiveness, while healthy employees and individuals will gravitate toward AHPs based on their cost.

The end result: Both healthy people and less-healthy/high-medical utilizers are going to be attracted to AHP coverage.

In this case, less-healthy/high-medical utilizers are going to choose to exit the individual and small-group markets to enroll in an AHP.

This, in turn, will actually benefit the individual and small-group markets — or at a minimum, AHPs will have no substantive impact on the existing insurance markets — because AHPs will be drawing less-healthy/high-medical utilizers out of the current risk pool.

More importantly, there are hundreds of thousands — if not millions — of lives that are currently not in the small-group or individual health insurance markets in the first place.

If these lives are ultimately covered by an AHP, this is a coverage gain that will have zero impact because these lives are not in the existing small-group and individual markets to begin with.

What would you like to see employers, benefits brokers and benefits consultants who agree with you to support AHP proposals?

I invite agents and advisors to take a look at the comment letter our coalition submitted back in February 2024, which explains in detail how our AHP 2.0 legislative language works.

In addition, if agents and advisors agree that employees of small businesses and self-employed individuals should have access to comprehensive and affordable health coverage options — as opposed to being locked into insurance markets that are working for some, but not working for many — I encourage them to join us in our advocacy for the enactment of our proposed AHP requirements.