The Washington Report
June 20, 2018
DOL Releases Final AHP Regulation; Definition of “Employer”
On June 19, 2018, the Department of Labor’s (DOL) Employee Benefits Security Administration released a final regulation under Title I of ERISA that establishes additional criteria under ERISA Section 3(5) for determining when employers may join together in a group or association of employers that will be treated as the “employer” sponsor of a single multiple-employer “employee welfare benefit plan” and “group health plan,” as those terms are defined in Title I of ERISA. The final regulation states that by “establishing a more flexible ‘commonality of interest’ test for the employer members than the DOL had adopted in sub-regulatory interpretive rulings under ERISA Section 3(5), and otherwise removing undue restrictions on the establishment and maintenance of Association Health Plans (AHPs) under ERISA, the regulation facilitates the adoption and administration of AHPs and expands access to affordable health coverage, especially for employees of small employers and certain self-employed individuals.”
According to the DOL news release, AHPs can serve employers in a city, county, state, or a multi-state metropolitan area, or a particular industry nationwide. Sole proprietors as well as their families will be permitted to join such plans. Consumer protections and health care anti-discrimination protections that apply to large businesses will also apply to AHPs organized under this regulation. The new regulation “does not affect previously existing AHPs, which were allowed under prior guidance. Such plans can continue to operate as before, or elect to follow the new requirements if they want to expand within a geographic area, regardless of industry, or to cover the self-employed. New plans can also form and elect to follow either the old guidance or the new rules.”
The final regulation becomes effective on August 20, 2018. For applicability dates, please refer to the final regulation.
The final regulation is temporarily available here.
(The final regulation will be published in the June 21, 2018, Federal Register.)
The DOL news release is available here.
Additional information about AHPs (including FAQs) is available here.
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