July 5, 2018

Association Health Plans Rules Finalized (article)

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.

The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein. 

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