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DOL Releases AHP Rule-making

Monday, January 22, 2018  
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Proposed Federal Guidance Issued on Association Health Plans

In October of last year, the President issued an Executive Order directing federal agencies to promulgate guidance that would expand the formation of both fully-insured and self-insured Association Health Plans (AHPs). Pursuant to that Order, The U.S. Department of Labor (DOL) has just issued a Notice of Proposed Rule Making (NPRM) on AHPs, the first step in the implementation of regulatory guidance.

As stated in the NPRM, the overall goal of the rule-making is to expand affordable health coverage among small employer groups and self-employed individuals by removing restrictions under current ERISA law. This goal is mainly accomplished by treating the association itself as the employer sponsor of a single plan. Several key highlights of the regulation include:

  • Modification of the “employer” definition to create a more flexible “commonality of interest” test, thus allowing associations with a common interest to provide health insurance across state lines.
  • Easing restrictions for self-employed individuals and “un-related” small employers to band together for the purpose of purchasing health insurance through a common association
  • Expanding access to AHPs by small businesses by allowing them to group together through a self-insured or fully-insured option.

While the DOL is seeking comments within 60-days on the overall rule, the agency is specifically requesting comments related to rules barring discrimination based on health status and whether that will incentivize relatively healthy people to leave the individual and small group markets, further destabilizing the individual and small group markets.  OFDA is reviewing the NPRM in more detail and requesting member input as we look to provide further comments to the DOL.

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