It has been the goal of the current Administration to expand the availability of association health plans (AHPs), as directed by an Executive Order on October 12, 2017. This Executive Order directs the Affordable Care Act’s governing agencies (Departments of Health and Human Services, Labor and Treasury) to develop ways for expanding access to association health plans for small employers. The intended result would allow AHPs to be available to small businesses that are in the same line of business to join together to offer healthcare coverage to their employees, either through existing organizations or new ones established, for the express purpose of offering group health coverage. Formation of AHPs would also allow the purchase of insurance across state lines.
In response to this directive, the Department of Labor (DOL) issued proposed rules and standards for establishing AHPs on January 5, 2018, following by final rules published on June 21, 2018. These rules expand the definition of association by loosening the commonality of interest standard, and by allowing self-employed individuals to participate. Notably, an AHP established in accordance with these rules avoids some of the small group health insurance rules imposed by the Affordable Care Act, such as rate restrictions and the obligation to provide essential health benefits.
The final AHP rules are more fully discussed in our CBIZ Health Reform Bulletin, Association Health Plans - Final Rules Released (HRB 139, 6/22/2018). Further, the DOL has established a dedicated AHP webpage for additional information including regulations, fact sheet and FAQs.
