DOL Finalizes Rule to Expand Association Health Plans

New York State Update 8/20/18: 
New York State confirmed that state insurance laws preempt ERISA; therefore, existing New York State laws which prohibit small group or individual associations still take precedent over the Department of Labor regulations. Refer to Department of Financial Services Circular Letter No. 10 from July 27, 2018 addressing Association Health Plans in New York here.
© 2018 New York State Association of Health Underwriters

Original Post 6/21/18:

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).
According to the DOL, this will provide small employers with more affordable health insurance options. However, in exchange for lower premiums, AHPs may cover fewer benefits. Most AHPs will not be subject to the Affordable Care Act’s (ACA) essential health benefits (EHB) reform, which requires small group plans to cover a core set of items and services, such as mental health care and maternity and newborn care.
Rolling effective dates:
  • All associations (new or existing): September 1, 2018
  • Existing associations: January 1, 2019
  • All other associations (new or existing): April 1, 2019
Not so fast…
The  attorneys general for New York and Massachusetts have announce that they will sue the government in an attempt to block the new rule. At this time small employers should wait until additional guidance is released before taking any action.

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