Proposed Rule to Potentially Expand Association Health Plans
Back on October 12, 2017, President Trump had signed Executive Order 13765. The first directive of
that order was for the Department of Labor (DOL) to find ways within existing law to expand the
availability of association health plans (AHPs). The goal was to allow small groups and self-employed
business owners more ways to band together and gain access to more insurance options.
On Thursday, January 4, 2018, the DOL announced the publication of an 83-page proposed rule which
seeks to fulfill the President’s objectives. The DOL will accept public comments for 60 days through
Tuesday, March 6, 2018. Nothing changes yet, not until a final rule is issued.
AHPs would continue to be treated as multiple employer welfare arrangements (MEWAs), which are
subject to enhanced reporting and scrutiny at both the federal and State level, so they do take
significant time and cost to establish and maintain.
We will need many more details, but for now, they are proposing to:
- Allow an association to sponsor a unified large group MEWA for employers:
- in the same line of business (even across state lines), or
- not in the same line of business but located in the same geographic area, meaning:
- any employer within one State, or
- any employer within a metropolitan area, even if it includes more than one State
(such as Kansas City)
- Allow forming an association expressly for the purpose of creating such a plan
- Prohibit the association from discriminating against association membership or health plan
participation based on health status
- Require the AHP to comply with HIPAA’s health nondiscrimination rules governing eligibility,
benefits, and premiums (i.e., cannot treat different employer members differently)
- Require the association have a formal organizational structure with a governing body, by-laws,
and control by members (such as through the regular election of directors/officers)
- Allow self-employed owners with no common law employees to join such plans, subject to some conditions on hours, income, and eligibility for other subsidized group coverage.