Labor Department Finalizes Rule Expanding Small Business Health Plan Options

On June 19, the U. S. Department of Labor’s Employee Benefits Security Administration released a final rule to expand association health plans (AHPs) and increase the flexibility for small employers to join groups or associations to offer insured health coverage in the large group market at potentially more favorable pricing with less restrictive requirements. A number of AGC Chapters across the country currently recognize the need to offer alternative health care options and administer AHPs that offer “group health plan” coverage to employees of members.  As outlined in response to the proposed version of the rule, AGC supports the flexibility in the proposed rule and is pleased that existing AHPs were preserved in the final rule.
The rule expands access to association health plans by loosening the definition of “employer.” Small businesses and self-employed individuals, known as working-owners, will be allowed to band together by industry or geography to obtain health care as a large group. The final rule retains the consumer protections and healthcare anti-discrimination protections currently applicable to large businesses and therefore will also apply to AHPs organized under this rule. New and existing AHPs can elect to follow either the old guidance or the new rules. State regulatory oversight over AHPs will continue without a federal exemption, but the DOL promises to work closely with state insurance commissioners to avoid any issues and share enforcement authority. The rollout of the plans will be phased, allowing some to start offering coverage as soon as Sept. 1, with additional rollout dates going through to next year.
Please visit the DOL’s webpage for further information.
For more information, contact Claiborne Guy at [email protected] or 703-837-5382.

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