Association Health Plans Final Rules

The Department of Labor recently published a final rule creating flexibility for employers and working owners to band together to sponsor a single Association Health Plan (AHP).

The final rule allows multiple employers to jointly sponsor a single group health plan by expanding the Employee Retirement Income Security Act’s (ERISA) definition of “employer.”

An AHP is a multiple employer welfare arrangement (MEWA) and is subject to the same federal and state rules as any other MEWAs.

USI anticipates existing associations, carriers and TPAs will carefully review these rules to determine whether to establish AHPs. Additionally, industry groups currently not providing an insurance option to its employer population may consider creating one of these AHPs. Further analysis is needed on a state-by-state level to understand the state laws that may affect the establishment and administration of these programs.

Also, the Attorneys General (AGs) in New York and Massachusetts have initiated a lawsuit against the administration challenging the validity of these rules. Depending on how quickly the AGs move, the effective dates outlined above could be affected.

Stay tuned to USI Northeast for further updates and developments!

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