On April 29, 2024, the U.S. Department of Labor (DOL) finalized a rule reversing a Trump-era regulation designed to expand the formation and use of Association Health Plans (AHPs), without having to comply with the requirements of the Affordable Care Act (ACA). AHPs are group health plans that cover small employers and self-employed individuals in the same or different industries. AHPs, which are governed by state and federal laws, have historically varied significantly in size and membership.
The 2018 Trump Administration Rule
The 2018 rule from the Trump administration that expanded AHPs was struck down by a federal judge in 2019 and was never fully implemented. The DOL stated the 2018 rule expanded the definition of AHPs in a way that would have allowed some individual and small group health insurance coverage to be treated as large group coverage. This change could potentially evade critical consumer protections under the ACA, which requires coverage of essential health benefits such as emergency and maternity newborn care.
The New Final Rule
The new final rule from the Biden administration, issued by the DOLs Employee Benefits Security Administration, will take effect 60 days after its April 30th publication. It is intended to ensure consumers have access to quality health coverage consistent with federal law, including the ACA’s requirements for essential health benefits.
While some proponents of the AHP argue they can provide small businesses and self-employed individuals with better bargaining power and lower prices, critics contend the 2018 rule would have undermined important ACA consumer protections. The new rule has been supported by the Biden administration but criticized by some Republican lawmakers as limiting workers’ health care options.
Managing These Changes
GMS can help your company stay compliant with the DOL’s new rule on AHPs and managing the associated challenges. Our team of HR and benefits experts can assist with analyzing your current health care plan offerings, determining the appropriate compliance requirements, and implementing necessary changes to ensure you are providing employees with quality, ACA-compliant coverage.
In addition, we provide guidance on navigating legal and regulatory uncertainties, training programs for managers and employees on the new rules, and ensuring your benefits administration processes are updated. By partnering with GMS, you can confidently navigate these complex regulatory changes and avoid potential penalties or disruptions in your employee health benefits. Contact us today to learn more.