DOL Proposes New Rules Expanding Association Health Plans Options

On Jan. 4, following Presidential Executive Order (EO) 13813, the U.S. Department of Labor (DOL) announced its plan to expand access to healthcare through small business health plans. The proposal could grant small employers greater flexibility to join with groups or associations to offer insured health coverage in the large group market at more favorable prices and with less restrictive requirements. The impact state laws might have on this remains unclear, especially for plans that are not fully insured and generally remain subject to state insurance laws.
EO 13813, “Promoting Healthcare Choice and Competition Across the United States,” directed the U.S. Departments of Labor, Health and Human Services (HHS), and the Treasury to develop rules to expand association health plans (AHPs), short-term limited duration insurance, and health reimbursement arrangements (HRAs).
The DOL’s proposed rule pertains to AHPs only by modifying the definition of “employer” under Section 3(5) of the Employee Retirement Income Security Act of 1974 (ERISA) regarding entities (AHPs) that could sponsor group health coverage. This change would allow employers to band together to offer health coverage if they are either: “(1) in the same trade, industry, line of business, or profession; or (2) have a principal place of business within a region that does not exceed the boundaries of the same State or the same metropolitan area (even if the metropolitan area includes more than one State).” The proposed rule would also allow working business owners, such as sole proprietors and other self-employed individuals, to act as employers for purposes of participating in an AHP, and as employees of their businesses to be covered by the group or association’s health plan.
Comments are due by March 6, 2018, and AGC will provide input to the DOL, as well as notify members of developments.
For more information, contact Jim Young at [email protected] or 202-547-0133 or Claiborne Guy at [email protected] or 703-837-5382.

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