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    DOL issues final rule on association health plans

    Authored by Bukaty Companies on June 29, 2018

    On June 19, 2018, the U.S. Department of Labor (DOL) issued a final rule to expand association health plans (AHPs). The new rule will make it easier for small businesses and self-employed workers to band together to purchase more affordable health care coverage.

    The final rule is fairly consistent with the proposed rule published earlier this year, and comes months after President Donald Trump issued his executive order promoting health care choice and competition across the United States.

    The rule broadens the definition of “employer” under the Employee Retirement Income Security Act (ERISA), in order to allow more groups to form AHPs as an alternative to the Affordable Care Act (ACA). AHPs will be regulated the same as large employer policies. For example, AHPs cannot deny coverage or charge higher premiums due to preexisting health conditions.

    In addition, the new rule allows employers in the same geographic region to obtain coverage through an AHP, even if they are in unrelated professions. According to the DOL, AHPs may be sold nationally, in groups of states or in a single state. The rule also attempts to strengthen AHP oversight by requiring associations to have a formal organizational structure with a governing body and bylaws.

    The final rule includes staggered effective dates. Fully insured AHPs may begin to provide coverage under the new rule as of September 1, 2018. Existing self-insured AHPs can operate under the new rule as of January 1, 2019, and new self-insured AHPs may be formed as of April 1, 2019.

    For more information, contact your Bukaty benefits consultant at 913.345.0440.

    Blog Category: Health Care Reform