On June 19, 2018, the Department of Labor (DOL) released a final rule that gives small businesses more freedom to join together as a single group to purchase health insurance in the large group market or to self-insure. These benefit arrangements are called association health plans (AHPs). AHPs have been available to small employers, but the Final Rule offers new options.

AHPs are a type of multiple employer welfare arrangement (MEWA). Because AHPs are regulated at the federal and state level, the availability of these plans will also depend on a state’s regulatory approach. ERISA allows states to regulate MEWAs under their own insurance laws and regulations. For example, to guard against fraud and abuse, a number of states provide that self-insured MEWAs must be licensed, registered, have a minimum number of participating employers, obtain an actuarial opinion that the MEWA can meet promised benefits and keep a minimum level of reserves. Several states prohibit self-insured MEWAs altogether.

The final rule allows fully insured plans to begin operating under the new rule on Sept. 1, 2018. Existing self-insured AHPs can begin operating under the new rule on Jan. 1, 2019, and new self-insured AHPs can begin on April 1, 2019.

Refer to the below Compliance Bulletin and Fact Sheet for details and contact your NEEBCo representative with questions.

DOL Finalizes Rule to Expand Association Health Plans

AHP Fact Sheet