Steve Mindy will present on the benefits and risks under new final DOL rule.
The Department of Labor (DOL) has published its final rule changing the definition of “employer” to allow association health plans (AHP) more latitude and give them better bargaining power in buying health insurance. The AHP serves as a single large employer, and thus the group can bypass some of the insurance requirements under the ACA and obtain a more favorable rating.
Under the rule, the DOL has loosened the requirement for “commonality of interest” in determining who can join an AHP. The members now can be in a common industry or share common geography by being in the same state or metropolitan region. As a result, more employers can join together and be treated as one large employer for purposes of providing health coverage. Even sole proprietors without employees may qualify as “working owners” who can be treated as both employer and employee.
However, states can still regulate AHPs. So even with the DOL’s new final rule change, interested small employers might have to take a careful look at the current state law. Even states that embrace AHPs might need to update their laws before AHPs can be offered there.