Final Rule on Association Health Plans

The DOL has released the long awaited final rule on Association Health Plans (AHPs), after the directive from the President’s 2017 Executive Order. The final rule largely tracks the proposed rule, in expanding access to large group insurance for smaller employers who come together and form associations. The rule accomplishes this by expanding what is considered to be ‘an employer’ within ERISA Title I, section 3(5).

AHPs are expected to be most beneficial to small employers, and sole proprietors located in the same state. This is due to the fact that at present, these are groups most burdened by the small group market requirements imposed by the Affordable Care Act, and the limited offerings in the small group insurance market.

The rule allows individual business owners and small employers to pool themselves, and be underwritten as ‘large group’, with the purpose of offering health insurance to its members. The‘pool’ can be based on shared industry or geography. The final rule does not change existing MEWA rules or state regulation of MEWAs, so these issues will still need to be watched in the formation of prospective AHPs.

The full text of the DOL’s final rule can be viewed online.