H.R. 2528, Association Health Plans Act

Bill Summary

H.R. 2528 would revise the definition of “employer” in the Employee Retirement Income Security Act of 1974, to newly enable groups of self-employed people and groups of employers without a common interest to form association health plans (AHPs). Under current law, only groups of employers with a common interest may establish AHPs to purchase health insurance collectively. Such plans typically can offer their enrollees lower-cost premiums than would be available in the nongroup or small-group markets.

Estimated Federal Cost

The estimated budgetary effects of H.R. 2528 are shown in Table 1. The costs of the legislation fall within budget function 550 (health).

Basis of Estimate

For this estimate, CBO assumes that the legislation will be enacted in fiscal year 2026 and that additional enrollment in AHPs will begin in calendar year 2027.

Direct Spending and Revenues

H.R. 2528 would allow self-employed people and groups of employers to form AHPs without meeting the current-law requirement to have a common interest among members. CBO expects that enrollment in AHPs would increase under the bill because AHPs typically offer premiums that are less costly than the modified community-rated premiums available in the nongroup and small-group markets.

In general, modified community-rated premiums can vary only on the basis of enrollees’ age, location, and tobacco use. By contrast, AHPs can adjust premiums based on other factors related to members’ health status. For example, members’ occupations could be used as a proxy for health status. Because AHPs can adjust premiums to account for factors that more closely underlie the health of enrollees, a healthier self-employed person or a small employer with healthier-than-average workers could pay less for premiums through an AHP than they otherwise would for modified community-rated premiums in the nongroup and small-group markets.

On the basis of a comparison of premiums under AHPs and under nongroup and small-group plans, CBO estimates that enacting H.R. 2528 would increase the number of people obtaining insurance through AHPs by about 725,000 per year, on average, over the 2027‑2036 period. CBO estimates that under current law, about 155,000 of those people (or about 20 percent) have no health insurance and that the remaining 570,000 obtain insurance coverage in the nongroup or small-group markets. That estimate reflects factors that would limit the ability of employers and the self-employed to join or form AHPs. Those factors include requirements that an AHP have a minimum number of employee members, be formed for a purpose other than providing health insurance, and exist for more than two years before offering such benefits.

CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting H.R. 2528 would increase federal subsidies for health insurance for two reasons in particular:

• Some self-employed people who are uninsured under current law would take up insurance offered through AHPs, thereby increasing new claims for the tax deduction for health insurance for self-employed people.
• Slightly higher premiums in the nongroup and remaining small-group markets would result from people with lower-than-average health costs shifting to AHPs. That change would increase federal costs for the premium tax credit for health insurance purchased through the marketplaces established by the Affordable Care Act and would shift a portion of some employees’ compensation from taxable wages to tax-favored health insurance for those insured in the small-group market.

CBO and JCT estimate that these changes would increase direct spending, on net, by $1.1 billion and decrease revenues by $3.3 billion, for a total increase in the deficit of $4.4 billion over the 2026-2036 period.

Uncertainty

CBO and JCT’s estimates of the budgetary effects of H.R. 2528 are subject to uncertainty because of the difficulty in anticipating employers’ responses to changes in health insurance costs and in projecting patterns of health care use, which affect premiums. The budgetary effects of enacting H.R. 2528 could be larger or smaller than estimated here.

Pay-As-You-Go Considerations

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays and revenues that are subject to those pay-as-you-go procedures are shown in Table 2.

Only on-budget changes to outlays or revenues are subject to pay-as-you-go procedures.

Increase in Long-Term Net Direct Spending and Deficits

CBO estimates that enacting H.R. 2528 would increase net direct spending by more than $2.5 billion in any of the four consecutive 10-year periods beginning in 2037.

CBO estimates that enacting H.R. 2528 would increase on‑budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2037.

Mandates

The bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.

Previous CBO Estimate

On December 16, 2025, CBO transmitted a cost estimate for H.R. 6703, the Lower Health Care Premiums for All Americans Act, as introduced in the House of Representatives on December 12, 2025. Both bills would expand AHP enrollment by establishing new rules for AHPs and the estimates are similar, but H.R. 6703 included several other provisions to modify requirements for individual and group health coverage, require contracts between plan sponsors and pharmacy benefit managers to meet certain standards, and appropriate funding for reductions in cost sharing.

Estimate Prepared By

Federal Costs: Emily Vreeland

Revenues: Staff of the Joint Committee on Taxation

Mandates: Andrew Laughlin

Estimate Reviewed By

Sarah Masi
Senior Adviser, Budget Analysis Division

Kathleen FitzGerald
Chief, Public and Private Mandates Unit

Chad Chirico 
Director of Budget Analysis

Estimate Approved By