Employer Health Plan Flexibility Act
- Sponsor
- Rep. Allen, Rick W. [R-GA-12]
- Committees
- Education and Workforce Committee (primary)
- Last action
- Jul 21, 2026
Bottom line
This bill aims to provide greater flexibility to employer-sponsored ERISA plans by removing the mandate to cover all ACA Essential Health Benefits, potentially leading to varied benefit offerings and cost structures.
What it actually does
This bill amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Public Health Service Act to exempt employer-sponsored group health plans governed by ERISA from the Affordable Care Act's (ACA) Essential Health Benefits (EHB) requirements. It mandates disclosure requirements for plans claiming this exemption, ensuring participants are informed about covered benefits and any omitted EHBs. The bill also explicitly preserves other federal health plan requirements, such as those related to mental health parity and nondiscrimination.
Proponents argue
Proponents argue that the ACA's EHB mandates impose unnecessary costs and restrict flexibility for employer-sponsored health plans, which often already provide robust coverage. They contend that exempting these plans would allow employers to tailor benefits to their workforce's specific needs, potentially reducing premiums and administrative burdens, fostering innovation in plan design, and giving employers more control over their healthcare offerings.
Opponents contend
Opponents would likely argue that removing EHB requirements could lead to a rollback of critical health benefits, leaving employees vulnerable to gaps in coverage, particularly for services like mental health, maternity care, or prescription drugs. They might contend that this could shift costs to individuals, disproportionately affect those with chronic conditions, and undermine the consumer protections established by the ACA.
The bill is very short and straightforward, making it highly accessible for a quick review by any interested party.
Section 2(a)
Exemption of ERISA Group Health Plans from ACA Essential Health Benefits
This provision amends the Employee Retirement Income Security Act of 1974 (ERISA) to explicitly state that employer-sponsored group health plans governed by ERISA are not required to provide coverage for the Essential Health Benefits (EHBs) as defined by the Affordable Care Act (ACA). This means these plans can choose which benefits to cover, rather than being mandated to cover all ten categories of EHBs.
Supporters argue
Supporters argue this restores employer autonomy and allows plans to be tailored to specific workforce needs, potentially lowering costs for both employers and employees by eliminating mandated coverage for benefits not always utilized or desired.
Critics contend
Critics would argue this could lead to a 'race to the bottom' in benefits, leaving employees without critical coverage for services like mental health, maternity care, or prescription drugs, and shifting healthcare costs onto individuals.
Tradeoffs
Balances employer flexibility and cost control against comprehensive benefit coverage and consumer protection.
Section 2(b)
Public Health Service Act Conforming Amendment for EHB Exemption
This provision amends Section 2707(a) of the Public Health Service Act (PHSA), which generally requires non-grandfathered group health plans to cover EHBs, by explicitly stating that this section shall not apply to any employer-sponsored group health plan governed by ERISA. This reinforces the exemption established in the ERISA amendment.
Section 3
Continued Compliance with Other Federal Health Plan Laws
This section clarifies that the bill's exemption from EHB requirements does not exempt group health plans from other existing federal mandates. These include provisions from HIPAA (portability and nondiscrimination), the Mental Health Parity and Addiction Equity Act (MHPAEA), COBRA, ERISA fiduciary duties, Internal Revenue Code requirements, general federal nondiscrimination requirements, and preventive services requirements (unless otherwise provided by law).
Section 4
Mandatory Disclosure for Exempt Plans
This section requires group health plans that claim the EHB exemption to annually provide participants with a notice. This notice must include a description of covered benefits, identification of any Essential Health Benefits not covered, information regarding cost-sharing, and instructions for obtaining the Summary Plan Description.