Broad Reach Benefits Blog Association Health Plan Rules Struck Down by Federal Court

Overview A federal judge ruled on March 28, 2019 that parts of the Trump administration's 2018 final rule on association health plans (AHPs) were invalid. The court directed the Department of Labor (DOL) to reconsider how the remaining provisions of the final rule are affected. In its ruling, the court stated that the final rule was an "end-run" around the Affordable Care Act (ACA) and that the DOL exceeded its authority under ERISA. The court specifically struck down two parts of the rule: The provision defining "employer" to include associations of disparate employers; and The provision expanding membership in these associations to include working owners without employees Action Steps Employers and business owners without employees that have joined an AHP, or are considering doing so, should review how their plans may be affected by the court's ruling. These employers can also monitor developments from the DOL on any changes made to the rule. Association Health Plans An AHP is a type of ERISA-covered group health plan that is sponsored by a group or association of employers (instead of a single employer) to provide health coverage to employees of the AHP's members. Under ERISA, an AHP is both a group health plan and a multiple employer welfare arrangement (MEWA). On June 21, 2018, the DOL published a final rule that allows more employer groups and associations to join together as a single group to purchase health coverage. The final rule allows AHPs to offer coverage to some or all employers in a state, city, county or multistate metro area, or to businesses in a common trade, industry, line of business or profession in any area, including nationwide. The final rule did not affect existing AHPs that [...]